Oral Answers to Questions

WORK AND PENSIONS

The Secretary of State was asked—

Benefits Payment

Peter Luff: What steps he has taken to ensure that all pensioners have been fully informed about the changes in the methods of paying benefits.

Tim Loughton: What steps the Government have taken to inform pensioners of changes regarding direct payment of benefits.

Andrew Smith: The Department is writing to all affected pensioners. That started in January and will continue for two years. The letters are backed up by a national advertising campaign, an information phone line and advice through the Pension Service so that people can choose the account that suits them best. No one needs to take any action until contacted. We are honouring the pledge to enable people who want to collect their money in cash at the post office to do that. So far, around half of the pensioners who have responded asked for the Post Office card account. All high street banks are offering basic bank accounts, which are, of course, accessible at the post office. Some main accounts will also be accessible.

Peter Luff: The Post Office card account was to be the salvation of many sub-post offices. Why are sub-post offices not allowed to promote it to their customers? I am delighted that half of them have taken up the offer, but it is a pathetic shadow of what it should have been. I have in my constituency a 91-year-old Royal Mail pensioner who cannot pay her pension into a Post Office card account. Perhaps the Post Office is not allowed to promote it because it is so inadequate.

Andrew Smith: Many sub-postmasters and postmistresses have been energetic in promoting the Post Office card accounts. [Interruption.] As I said, if the hon. Gentleman will listen, in my initial answer, around half of the pensioners who have responded requested the Post Office card account. That hardly points to failure to promote it. All the material that we issue draws the account's availability to pensioners' attention. The hon. Gentleman should recognise that it is not our job to tell pensioners or other benefit claimants what form of account they should have. That is up to them. Instead of harking back to the days when people were forced to use the post office, I hope that Conservative Members will embrace modern options that offer more choice, convenience and flexibility, and less fraud.

Tim Loughton: My constituents are doubly interested in the matter. The headquarters of the National Federation of Sub-Postmasters is based in my constituency, which also has many pensioners. For many years they have been forced to use post offices, but are happy with that system. They are greatly concerned by proposals to introduce key pads, which, as we warned for many months, are not suitable, especially for those with disabilities and those who rely on the help of sub-postmasters.
	Will the Secretary of State confirm that key pads that are deemed not to be disabled-friendly are being ripped out? Will he also state when that will happen, the cost of doing it and the reason for the time it has taken to get around to it? Will he confirm that sub-postmasters and mistresses can continue to help people who need guidance to get the benefits that his ridiculous red tape and bureaucratic nonsense prevent them from obtaining?

Andrew Smith: I will not let the hon. Gentleman's rhetoric get in the way of a sensible answer, because I can reassure him about several points. Like other hon. Members, he knows that 68 per cent. of new pensioners have money paid in to their bank account and that 90 per cent. of pensioners have access to a bank account. That is why the choice that we are making available is so important.
	The hon. Gentleman is right that the Post Office is reviewing the PIN pad's adequacy. It is developing a key guard, which will help to guide users who might otherwise have difficulty in using the PIN pad. I assure him that the Post Office will be able to help disabled customers. Moreover, it has put in place specific training programmes to ensure that staff can assist disabled customers.
	I assure hon. Members that no one requires those who cannot use the PIN pad to give up their order books. The Post Office is developing alternative technology to ensure that all customers can access cash in the post office in a modern and secure way when the order book is no longer available. We should remember that every week, 100 pensioners have their pension payment books stolen. Modern methods of payment put that theft and fraud behind us.

David Kidney: Is it not the case that, on retiring, many people chose a bank account into which their pension would be paid before direct credit was introduced? Is not it important for the viability of small post offices that they capture the market in banking services?

Andrew Smith: My hon. Friend makes a good point. I have already cited the statistic that 68 per cent. of new pensioners opt to have their pensions paid into bank accounts. My hon. Friend is right to say that there is an opportunity for the Post Office to build on the £2 billion that we are making available for investment, including £450 million to sustain rural networks. This is a major opportunity for the Post Office to expand its banking opportunities and to maximise its footfall, thereby guaranteeing a commercially viable future for a service that every hon. Member values enormously.

Martin O'Neill: This is a complex issue, and it requires a great deal of expenditure of time, effort and money to get across the complexity of the message. Is my right hon. Friend aware that, in discussions that my colleagues on the Trade and Industry Committee and I had with Post Office Counters representatives, we were informed that, based on their experience in private banking, those representatives believed that a move of this radical character would need an expenditure of about £100 million on advertising? I understand that the Department for Work and Pensions has made available barely a third of that amount.

Andrew Smith: I greatly welcome the contribution that my hon. Friend and his colleagues on the Select Committee are making to the examination of this important issue. It is rare for a Minister at the Dispatch Box to be urged to spend more money on advertising than he is currently doing. However, before we compare our expenditure on the promotion of the Post Office card account and direct payment with what would be spent in the commercial world, we must remember that we are in a position to write to all our customers, as we shall be doing over the next couple of years. I am satisfied that the £25 million that we have allocated to publicity, including national advertising, is a reasonable allocation. Of course we shall be reviewing progress, and I am sure that my hon. Friend's Select Committee will be keeping the matter closely under review as well. Should it be necessary to vary the advertising budget, or the way in which that is organised in the future, I stand ready to do so.

Oliver Heald: The Secretary of State will know that many people—some of whom are among the most vulnerable in our society—are concerned about this change to direct payment, not least because of the fiasco of the PIN pads. Many pensioners are simply unable or unwilling to make the change that the right hon. Gentleman is asking them to make. Ministers have claimed that those people's interests are to be safeguarded by an exceptions service, but I have asked numerous questions about this and Ministers have given no further details about either the timetable or the nature of the service. Will the Secretary of State now give the House an assurance from the Dispatch Box that the exceptions service will be fully up and running throughout the country by 2005? Will he also, at last, reveal what criteria will determine whether someone will qualify for the service? Will it be restricted to those who are medically unable to open or manage an account, or will those with other genuine concerns about direct payment also be included? The Government must now give answers to these questions. If they do not, they will be providing yet more confirmation that the only exceptional thing about this whole mess is the exceptional incompetence of the Department for Work and Pensions.

Andrew Smith: The exceptional thing is that such a huge undertaking as the introduction of a universal banking service has got up and running properly and on time. Whatever other criticisms the hon. Gentleman might have, he ought to be congratulating the Post Office and the staff at the Department for Work and Pensions on achieving that. In answer to his questions: yes, we shall have the exceptions service up and running by the time that it is needed, when order books are no longer available. On the criteria, we shall consult closely—as we have done already—with representative groups of older people, disabled people and others to ensure that those criteria are sensible and meet people's needs, so that all those who want to do so can access their cash at the post office, as well as using the other options available to them through bank accounts, building society pass books and cheques.

Private Pension Funds

Mark Hoban: If he will make a statement on the current value of private pension funds.

Maria Eagle: At the end of 2001, the most recent year for which Office for National Statistics figures are available, it was estimated that the total assets of self-administered pension funds were about £712 billion.

Mark Hoban: One of the concerns that my constituents express when faced with the decline in value of their pension funds relates to how they could live off the annuity that the funds would purchase. What thought have the Government given to relaxing the ways in which such funds can be used, so that pensioners could maximise their income and thus reduce their dependency on means-tested benefits?

Maria Eagle: The hon. Gentleman will have seen the Green Paper that was published recently. My right hon. Friend the Secretary of State will publish further proposals soon. As the hon. Gentleman will know, there are suggestions in the Green Paper.

Frank Field: The news that the Minister has given today will be welcomed by about half the population, who have a stake in occupational pensions. But will she give us some idea of what the Government plan to do for those who, having thought that they had a stake, find that their schemes have been wound-up and their claims have either disappeared or largely disappeared? Are the Government thinking of using some of the £13,000 million of unclaimed assets that lie idle in the balances of banks and building societies as an endowment, to ensure that the loss of funds that people thought they had for their retirement can be made good?

Maria Eagle: As ever, my right hon. Friend has advanced interesting ideas about this in his Pensions (Winding Up) Bill. I know that over the weekend he spoke to the ASW pensioners, who organised a march to draw attention to their circumstances. Such cases bring into sharp focus the need for action to reduce the risk of such developments. There is no doubt that those who lose their pensions—and their families and friends—will be less likely to save for the future. It behoves us all to come up with arrangements that will protect pensions better, otherwise people simply will not save.
	The right hon. Gentleman mentioned unclaimed assets. "Unclaimed" does not necessarily mean that the assets do not belong to someone. The right hon. Gentleman knows as well as I do that these issues are fraught and difficult, especially for those currently affected, but we are willing to consider any suggestions that he or anyone else may have. That has been the aim of our consultation. The response to the Green Paper will enable us to change the arrangements so that similar problems do not occur in the future.

Steve Webb: As was pointed out by the right hon. Member for Birkenhead (Mr. Field), the value of a pension fund to a worker whose employer goes bankrupt is often a tiny fraction of what the worker expected. The Government have let it be known through the media that they are considering an insurance-based solution. Does the Minister agree that any insurance scheme must be underwritten by the Government? Otherwise there could be yet another fraud, and people could not just lose the pensions they had expected but find that the insurance schemes have gone bankrupt as well.

Maria Eagle: The hon. Gentleman refers to speculation in the press about what might be in the response to the Green Paper. It is for my right hon. Friend the Secretary of State to present that response to Parliament; I cannot speculate on suggestions in the newspapers.

Ken Purchase: Does the Minister understand—I am sure she does—that when a company goes into administration with the pension fund in tow, as has happened at Chart Industries, Incorporated in my constituency, it takes years for workers to become aware of their pension entitlements? That is a very anxious time for people. Would the Minister consider telling her friends in the Treasury that it might not be a bad idea for those with company pensions to be preferential creditors pari passu with Government demands, rather than ordinary creditors not knowing, at the end of the day, what is left with which to pay the pensions?

Maria Eagle: That is one of the most distressing aspects of the winding up of pensions—apart from the fact that it occasionally takes far too long. Suggestions in the Green Paper about the time it takes have been welcomed throughout the House, and outside. People are often left not knowing what percentage of their original pensions they will be left with.
	This is a crucial challenge. Proposals in the Green Paper for assets to be shared more fairly when schemes are wound up have been widely welcomed, but we need to ensure that action is taken. We also need to speed up the winding up of schemes, and try to ensure that most of the assets of what may be small funds are not swallowed up in fees. We want savers to feel confident that it is sensible to put their money into pensions.

James Arbuthnot: These are serious issues, raised by Members in all parts of the House. I know that the Minister recognises that. Is it not a shame that the Prime Minister appears not to recognise the seriousness of the issues, having failed to appoint a replacement for the Minister for Pensions in the last 60 days?

Maria Eagle: May I say to the hon. Gentleman and others who have raised this matter in the House that the absence of my right hon. Friend the Member for Makerfield (Mr. McCartney) makes me the smallest Pensions Minister on the Government Front Bench? I can also assure the House that his absence has not delayed the work that is being done by the Department to deal with the Green Paper and the arrangements that need to be made. I can assure the hon. Gentleman that it has not delayed the date at which we shall produce our response to the Green Paper.

Hebburn Offices

Stephen Hepburn: If he will make a statement on the future of his Department's offices in Hebburn.

Nick Brown: The Hebburn offices accommodate 607 officials from the Department for Work and Pensions and the Inland Revenue. The lease on the building, which is held by the Inland Revenue, is due to expire on 23 June 2006. The Department for Work and Pensions is working with the Inland Revenue to identify suitable alternative accommodation in the Tyneside area. Alternative accommodation has already been found in Tyneside for more than 500 staff that are based at the Hebburn site. My hon. Friend will also be pleased to learn that the new Jobcentre Plus service in Jarrow will be rolled out by the end of this year. In addition, Gateshead and south Tyneside have been successful in gaining one of the new incapacity benefit pilot areas. That will be welcome news to local people, not least because it will give those who thought they had left the traditional shipbuilding and engineering industries for ever a chance to return to some of the jobs that are coming to the river.

Stephen Hepburn: I am aware that more than one Government agency is situated in that building. However, as the Minister stressed, many hundreds of south Tynesiders' jobs are in that building, and the closure will have a massive, adverse economic impact on the local Hebburn shopping centre. Will he get together with his fellow Ministers to review the position and ensure that the offices do not close?

Nick Brown: I can give my hon. Friend two assurances. He knows that I want to do everything I can to help. First, I assure him that the jobs will not be lost: they are being relocated on Tyneside. Secondly, I realise the impact that this move is bound to have in the Hebburn area, and if he would like a meeting with me and officials from the Inland Revenue to discuss what can be done to redevelop the site once the lease runs out, I would be happy to arrange a meeting with him to see whether we can find a constructive way forward for the people of Hebburn.

Child Support Agency

Bob Russell: How many people have been prosecuted for making false statements to the Child Support Agency.

Richard Page: If he will make a statement on the Child Support Agency.

Malcolm Wicks: Twelve people have been prosecuted under section 14A of the Child Support Act 1991. The Secretary of State's targets for the Child Support Agency for 2003–04 were published on 29 April in the agency's business plan. Those targets require a further improvement in performance, building on the progress made in recent years. I should add that the agency has more than doubled the amount of maintenance delivered from £300 million in 1995–96 to £770 million in 2001–02.

Bob Russell: Is the Minister seriously suggesting that there are only 12 dishonest, lying fathers who, when filling in the forms, try to deprive their children of the maintenance that they should receive? Surely there is a case to be made for some serious prosecutions against fathers who cheat their children, so that they are made to pay. I am talking not about the fathers who go out of their way to provide maintenance for their children, but about those who lie and cheat. The Child Support Agency must know who they are.

Malcolm Wicks: Certainly, we must be tough with those who lie and cheat, but the whole purpose of our powers is to ensure that people give the necessary information in the first place. We have tough powers, and we work closely with the Inland Revenue. When we think that the non-resident parent's lifestyle is not compatible with the income they tell us they receive, we can vary the order to make them pay up and pay more maintenance.

Richard Page: When will the new formula for calculating the maintenance be introduced for existing as well as new cases, so that there is equality of treatment for my constituents? Will the new formula in any way reduce the number of successful claims for maladministration, which have soared from 1,389 in 1997–98 to 12,007 in 2001–02?

Malcolm Wicks: Where there is maladministration, and we try to cut that, it is right and proper that people have redress. I understand the question. As soon as we can bring all cases on to the new system, the better, but it is a massive operation. The new scheme only started in March. We will publish data on the first quarter in July this year, but the House will have to be patient. Time will pass before we can make a decision on bringing on board the old cases.

Bill O'Brien: Would it be right to say that not all absent parents are fathers—there are mothers who are absent parents? Will my hon. Friend give some idea as to what progress is being made in ensuring that the third of children who are not receiving maintenance receive maintenance through Child Support Agency procedures? Given that the first eight weeks of payment are disregarded, will the absent parent now be responsible for making maintenance payments for the whole period from when the application is made by the parent with care?

Malcolm Wicks: The purpose of our child support reforms, which, as we have noted, are currently for new cases only, is to shift the burden of emphasis from assessment, which will be much easier and based on a simple formula, towards enforcement. However, as I said, more maintenance is now going to parents with care—usually the mother but, as my hon. Friend says, sometimes it is the father. We have new powers and we are absolutely determined in all sorts of ways that parents, whatever their family situation, recognise their responsibility to bring up and to fund their own children.

Ann Cryer: Can the Minister comment on how much cross- checking is achieved between statements to the Child Support Agency and statements to, for example, the Inland Revenue and housing benefit, working tax credit and immigration entry clearance departments?

Malcolm Wicks: Increasingly, we have powers and we have the authority of Parliament to cross-check data. Perhaps I will write to my hon. Friend about some of the details. We all know that while the great majority of self-employed people are honest, there can be a problem in compliance with maintenance. Since 1999, the agency has asked self-employed non-resident parents to provide copies of their tax return. That shows that we are moving in the direction that my hon. Friend is, I think, suggesting.

Pension Service

Annabelle Ewing: What plans he has to improve the operation of the Pension Service.

Andrew Smith: The Pension Service is working well. It is geared to providing a high-quality personal service that puts the needs of pensioners first. Both its call centres and local service have been well received by pensioners. A key task is the delivery of pension credit from this October, for which preparations are well in hand. I will be publishing quarterly updates on overall progress during the run-up, the first in July and the second in October. The figures for October will be published in November and there will be regular monthly reports thereafter.

Annabelle Ewing: I thank the Secretary of State for his answer, but has not centralisation of services led to difficulties for pensioners such as those in my constituency, who have had to travel far greater distances to obtain comprehensive advice? Taking into account the imminent implementation of the pension credit, can he today give an assurance that we will not see a repeat of the recent tax credit fiasco?

Andrew Smith: One of the things I sensibly did, anticipating the question, was to check whether the Dundee call centre, which serves the hon. Lady's constituents, had had any problems with its telephony. I was assured that it had not. Indeed, the system was working very well and at least 94 per cent. of calls got through first time, which is a good record for any call centre, whether in the public or private sector. On personal access, I know that there are surgeries every Thursday at the A.K. Bell library in Perth, on the first Tuesday of the month at the Kinloch Rannoch medical practice, and on the last Wednesday of every month in Crieff library, as well as at Kinross-shire day centre in Kinross on the last Tuesday of every month. If the hon. Lady or indeed other hon. Members have suggestions as to how the surgery arrangements for constituents offered by the Pension Service can be improved, I and the Pension Service will be very pleased to consider them.

Anne Begg: I have heard a couple of anecdotal stories about some pensioners who are having to wait up to three months to get their first pension payment once they reach the age of 60 or 65. I have written to the Department, and am awaiting a reply, on whether that happens only occasionally or is more widespread. Will my right hon. Friend assure me that he speaks to people from the Inland Revenue to make sure that lessons are learned from the implementation of the child tax credit—particularly with regard to the scanning-in of documents, which sometimes leads to the misreading of information—so that such hiccups do not happen when the pension credit comes in?

Andrew Smith: On my hon. Friend's first question, after the statement, I shall go back to the Department to find an answer concerning her correspondence. I do not believe that such delays should be in any way typical and I should be disturbed if they were. I shall look into the specific case that she raises.
	On the lessons for the roll-out of the pension credit, and our telephony, scanning-in and other services, I assure my hon. Friend that we are learning from other tax credits. That is one of the reasons why, in introducing the pension credit, we have been careful to phase the publicity and the projected take-up, so as to align them with the capacity that the system must have in place to meet demand. It is early days, but I have had positive reports of pensioners' experience in applying for the pension credit using the telephone system.

Retirement (Financial Independence)

Peter Viggers: What steps the Government are taking to promote financial independence in retirement.

Maria Eagle: We must renew the pensions partnership between Government, employers, employees and the industry to ensure that individuals feel that saving for their retirement is worth while and safe. The recent Green Paper sets out our proposals for greater security, simplicity and better information to promote pensions saving.

Peter Viggers: The Government have presided over a crisis in pensions provision. The savings ratio has halved and 40 per cent. of final salary schemes are closed to new members. Some schemes have collapsed completely, resulting in millions of 30 to 40-year-olds no longer looking forward to independence in retirement. Those are matters of fact. My question is this: is this the result of incompetence on an epic scale, or does it suit the Chancellor's tendencies towards socialism to have a rising two thirds of all pensioners on means-tested benefits?

Maria Eagle: The hon. Gentleman's original comments gave too bleak an assessment. What he calls "means-testing", we call giving current pensioners some decency in retirement. The pension credit will end the weekly means test, while giving an extra £400 a year on average to half of all pensioner households, tackling pensioner poverty. His party is committed to keeping means-testing by abolishing the pension credit. He is committed to a weekly means test, pound-for-pound withdrawal of benefit and impoverishing today's pensioners as some kind of incentive to today's working-age people to save. After all, that was the policy of his party when it was in government.

David Winnick: May I tell my hon. Friend about a 57-year-old constituent who, along with all the other employees of the company mentioned earlier by my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase), Chart Heat Exchangers, lost his job, after 23 years, and his pension? Can my hon. Friend understand the feelings of my constituent, who faces a retirement of absolute poverty because the company did not defend or pay into the pension scheme, as it promised? How would we as Members of Parliament like it if we were treated with such contempt when it came to our retirement?

Maria Eagle: My hon. Friend is right to reflect the feelings of his constituents, and I should be happy to meet him and other right hon. and hon. Members with constituents affected by this closure. If we are unable to renew our pensions partnership in order to have simpler pensions, to balance simplification and clarity, to help employers to deliver their pensions promises, to improve security and to ensure that members receive the benefits they have paid in for, our system of voluntary provision will not survive. That is why the Green Paper outlines our proposals. If we are not able to do that, we will have to be more radical and, as many hon. Members think, look to compulsion. The Pensions Commission is there to look at that if necessary.

David Willetts: May I explain to the Minister that our policy is that pensioners should be less dependent on means-tested benefits and should enjoy greater financial independence through more funded savings? That is very simple and it is what pensioners want. On the statement that we will hear from the Chancellor later today, 11 million pensioners who care about their independence will be worried that he is going to change the index used for uprating their benefits from the retail prices index to the new index: the harmonised index of consumer prices, known as HICP. Will the Minister give us and those millions of pensioners an assurance that there will be no reduction in the value of the uprating of their benefits if the index for measuring price inflation is changed?

Maria Eagle: Pensions and benefits are linked to the retail prices index, which is a slightly different measure from the one that the Chancellor is considering changing in respect of these other matters. We have already committed ourselves to increasing pensions by more than the RPI for the rest of this Parliament, as the hon. Gentleman knows. There is no question of any of the changes that my right hon. Friend the Chancellor might deal with later, to which the hon. Gentleman refers, having an impact on that.

Tony McWalter: Can my hon. Friend give any help or succour to Mr. Humphrey, a constituent of mine whom The Guardian named on Saturday, and who was part of a delegation that marched to Downing street yesterday? Having worked for a company called Dexion in my constituency, he was looking forward, at the age of 58, to a pension of £150 a week. That pension has been slashed by 80 per cent. to £30 a week. Does my hon. Friend accept that, if she cannot give any comfort to people in that position, surely those who are responsible for such dreadful administration of a pension scheme should be brought to book somehow?

Maria Eagle: Cases such as this, which Members have come across in various situations in their own constituencies, have ensured that we have had to look at how to renew the pensions partnership. Unless we can have better safety and security, people simply will not save into pensions products in future. Of course, in such a situation everybody would be worse off. The Green Paper will introduce our proposals shortly, in response to the question of how to renew that partnership. If we do not do so, there will be problems in the future in respect of everybody.

Paul Goodman: Since the Government's assumed take-up of the pension credit for next year is 67 per cent.—an assumption that they themselves describe as ambitious—does it not follow that they expect non-take-up to be 33 per cent.? In other words, more than a third of our vulnerable pensioners will gain nothing at all next year from the pension credit.

Maria Eagle: We want everybody who is entitled to pension credit to take it up as soon as they can get on the telephone and put in their applications. It is simply not the case that we want to place some form of ceiling or cap on those who are entitled to claim. Of course, we have working assumptions about what we want to get done within a certain time, but those are targets, not ceilings. We hope to outstrip them, and we want everybody who is eligible for the pension credit to claim it. If hon. Members would get behind the Government, stop calling the provision means testing and urge their constituents to claim their entitlement, perhaps more might claim rather sooner.

Housing Benefit (Midlands)

David Taylor: What progress has been made on housing benefit pathfinders in the midlands.

Malcolm Wicks: We are testing a new standard local housing allowance in 10 pathfinder local authority areas, starting from this October; one such area is Coventry. Public consultation by the Social Security Advisory Committee on draft regulations for the scheme ends today, and officials are working very closely with the 10 authorities to help set up the pathfinders.

David Taylor: As is traditional for Back Benchers in pre-reshuffle fortnight, I warmly congratulate the Government on the housing benefit pathfinder initiative for private sector tenants, which will undoubtedly drive down fraud and widen choice and personal responsibility. Can I point out, however, that three-quarters of housing benefit cases are tenants of local authorities or registered social landlords? When do the Government expect to roll out the new approach to embrace those millions of cases? Will they reflect on authorities such as my own, North-West Leicestershire, which has one of the best track records in the midlands for processing housing benefit? How can we learn from such authorities?

Malcolm Wicks: It is right to embark on a radical reform of housing benefit, so that we can empower tenants and give them greater choice in their local communities. There are some difficulties and questions, which is why we are running a pilot for the private rented sector in 10 areas and evaluating it carefully. Yes, we do want it to apply in the social rented sector, and I hope that, before too long, where conditions allow, we will pilot the scheme in a social rented sector area as well.

Incapacity Benefit Claimants

John Randall: What the impact is on an incapacity benefit claimant of the receipt of an armed forces pension.

Nick Brown: Armed forces pensions paid on cessation of service, rather than because of disablement in service, are treated in the same way as other occupational pensions, whereby the first £85 of income is totally disregarded and only 50 per cent. of the excess is taken into account. However, basic war pensions, paid because of disablement in service, are completely disregarded and do not affect incapacity benefit. Incapacity benefit is intended to provide a source of income for sick and disabled people of working age. We believe that it is therefore right to take some account of income from their occupational pensions.

John Randall: Does the Minister agree that for this particular category of person, that particular means-testing is the most mean-spirited of them all and should be got rid of?

Nick Brown: We are in danger of repeating the exchange that took place during the Department for Work and Pensions questions in February. The fact remains that we disagree on the matter, but I re-emphasise the point that basic war pensions, paid because of disablement in service, are completely disregarded.

Tim Boswell: Having heard the hon. Member for Liverpool, Garston (Maria Eagle) trying to say that means tests do not really take money away, is this not yet another example of a nasty little means test invented by the Government? The only redeeming features are that in this particular case it hits a relatively small number of people, albeit people who have served the Crown, and that it appears not to be characterised—a rather greater redeeming feature—by the same administrative shambles that has already hit the Chancellor's child tax credit and is doubtless about to hit the Minister's own Department's pension credit in the autumn.

Nick Brown: I do not accept the hon. Gentleman's analysis. Those who have served the armed forces and have occupational pensions are being treated no differently from anyone else. It is more likely nowadays that people leave the armed forces early and move into some other walk of life. It is right to treat them the same way as anyone else. If the hon. Gentleman is committing the Conservative party to repealing the measure, will he clarify how extensively the party intends to act and how much money it intends to spend?

Antisocial Behaviour

Vera Baird: What plans his Department has to tackle antisocial behaviour through Housing Benefit sanctions.

Malcolm Wicks: We are determined to tackle the antisocial behaviour that brings misery and disruption to so many of our constituencies. We are interested in the idea that was first floated by my right hon. Friend the Member for Birkenhead (Mr. Field). People have rights, but they also have responsibilities. On 20 May my right hon. Friend the Secretary of State wrote to a range of organisations seeking their views on the introduction of a housing benefit sanction against antisocial behaviour. We will consult communities on housing estates and the victims of antisocial behaviour. I hope that all hon. Members will also consult their communities. We await the responses to the consultation before setting out our specific proposals.

Vera Baird: How can a scheme be devised that does not punish people in the household who are not the perpetrators and have no control over the perpetrator? The Minister will be aware of the probable links between antisocial behaviour by adult males and domestic violence. Secondly, is the Minister going to devise equally intrusive punishments for those who are not on benefits?

Malcolm Wicks: Of course, we have the Anti-Social Behaviour Bill before the House at present, which will introduce several powers, and that will be another weapon in that armoury. We are consulting on that, because any measure has to be practical and we must have regard to human rights, including in those situations that my hon. Friend describes. However, when a victim has to become homeless—I know of such a situation in my constituency of Croydon, North—to get away from the bullies, I am interested in the rights of the victims, not only the rights of the perpetrators.

Andrew Selous: Is the Minister aware of the extreme frustration felt by many of my constituents, who daily suffer antisocial behaviour and who—to make their lives tolerable again—want their local authority housing department and other social landlords to have more powers at their disposal?

Malcolm Wicks: Yes, I am aware of that and of the hon. Gentleman's support for the measure. I am also aware that we would have had a private Member's Bill on the subject on the statute book now, if it had not been blocked by the Liberal Democrats, who are more on the side of the thugs than of the victims. We want to introduce enforceable powers that have regard to the rights of those members of the problem household who are innocent, but address the problems of those people who are sick and tired of the neighbour from hell making their lives a misery.

Kevin McNamara: Is not one of the problems caused when local authority tenants live cheek by jowl with private tenants, perhaps of those people who have bought former council houses? There is no sanction on the landlord of a former council house to control what sort of tenant he takes and how they are treated. As long as the landlord gets the housing benefit, he does not care a damn about the people who live next door.

Malcolm Wicks: We have to be aware that just as there is a small minority—albeit an important number—of rogue tenants, there are also rogue landlords, who do nothing to control the behaviour of tenants or to repair property and simply claim the housing benefit—

Henry Bellingham: Rogue elements!

Malcolm Wicks: Well, some of us take the subject seriously, as do our constituents. The Office of the Deputy Prime Minister has introduced new powers to bear down on abuse in the privately rented sector.

Julian Brazier: I suspect that every hon. Member, like the Minister and myself, has constituents who have had to flee their homes because of such dreadful behaviour. It is more than a year since the Prime Minister said at Prime Minister's questions that he approved of action to address that. He said that the vast majority of people in this country will support the idea that people who get benefits from the state owe some responsibility in return. Why is it that the Government refused to give time to the Bill introduced by the right hon. Member for Birkenhead (Mr. Field)? The Minister said that a Bill on the issue is before the House, so why have the Government not put such powers in it? Above all, why are they only just starting a process of consultation, 14 months on?

Malcolm Wicks: The hon. Gentleman is being unfair for once, which is unlike him. We did our best to amend my right hon. Friend's private Member's Bill. We spent many hours in Committee trying to get it right, with the help of Conservative colleagues. However, despite broad support, it was talked out by the Liberal Democrats on a Friday morning. We need to turn principle into proper practice, and it is right to consult on that, including with the victims.

Employers' Liability Insurance

Andrew Dismore: If he will make a statement on the future of employers' liability insurance.

Nick Brown: The first stage report of the Department's review of employers' liability compulsory insurance was published on 3 June. The report sets out a series of actions including the scrutiny of industry service standards, especially renewal periods; a move towards fairer risk-related premiums to reward those with strong health and safety records; and the development of self-assessment packages to enable businesses to better manage risks. In the longer term, the Government will further evaluate the evidence for separating long-term occupational disease from accident risks, focus on legal costs and give rehabilitation a more central role in the UK compensation system.
	It is worth making progress on all of those issues and Ministers will report on progress that has been made and any further steps we intend to take in the autumn.

Andrew Dismore: I am sure that my right hon. Friend would agree that the best way to reduce premiums is to stop people getting unnecessarily injured at work in the first place. However, I am pleased that he has indicated a commitment to rehabilitation, because if people can return to work more quickly that is a good way of cutting the cost of employers' liability premiums. Will he discuss with the Secretary of State for Health what can be done to improve rehabilitation services and will he respond positively to the suggestion from both the TUC and the Association of British Insurers for a national rehabilitation leadership council to take that proposal forward?

Nick Brown: I strongly agree with my hon. Friend on both points. Discussions are under way with the Department of Health on what more can be done on rehabilitation. Following our Green Paper, rehabilitation pilots are under way and the location of all seven pilots has been announced to the House. The report itself has been welcomed by the CBI, the TUC and the ABI, and there is a real prospect of making constructive progress in that area.

Vincent Cable: The report will be profoundly disappointing to many small businesses as it does little more than acknowledge the existence of a crisis of which they were painfully aware six months ago. Specifically, what were the results of the Minister's discussions with the Lord Chancellor about cutting legal costs? They account for 40 per cent. of all compensation and that is what has been driving up many of the insurance premiums.

Nick Brown: The hon. Gentleman is not being entirely fair. I urge him to look both at the analysis in our report and the complementary analysis in the report of the Office of Fair Trading, which was put into the public domain on the same day. There are no easy solutions. The hon. Gentleman is right to stand up for small businesses and to voice their concerns about rising premiums. Far and away the best means of getting premiums down is to relate premiums to risk—if the risk comes down, the premiums should come down—and to make the market work better. That is what the proposals in our report are designed to do.

Derek Foster: My right hon. Friend knows, because I have discussed it with him, that a cluster of roofing contractors in Bishop Auckland employs about 1,000 people. They have complained bitterly to me about the increasing employers' liability premiums. I do not think that they will regard the Government's report as radical enough to deal with the situation. If we do not take the matter more seriously, I am afraid that many small businesses will go out of business.

Nick Brown: My right hon. Friend is right to stand up for small businesses in his constituency. We want the premiums to be stabilised and for there not to be undue burdens on small businesses. The way to do that is to reduce the risk and thereby reduce the premiums. The Health and Safety Executive is working on a self-assessment tool, which is designed to help small and medium-sized businesses in that situation. Some longer term work needs to be taken forward and it is the Government's intention to bring the discussions with the industry to a conclusion in the autumn. I very much hope that we shall be able to produce something that is of practical assistance to my right hon. Friend's constituents.

John Butterfill: Is the right hon. Gentleman aware that not only small, or even medium-sized businesses but local authorities, too, are in a dire situation? The Local Government Association tells us that only three underwriters are now prepared to underwrite this type of business. That situation has largely come about because of no win, no fee and the chasing after business by unscrupulous solicitors. There may be a need not just for adequate risk assessment, but also to cap liability, as has been done in some other sectors, so that those engaged in proper risk management will not incur an unlimited amount of liability. [Interruption.]

Mr. Speaker: Order. There is far too much noise in the Chamber. It is unfair to Members who are here for Question Time.

Nick Brown: Partly for the reasons that the hon. Gentleman sets out, we are continuing our discussions with the industry on the vexed question of long-term risks and reasonably carrying the burdens that arise from them, but this is quite a complex issue and the analysis in both reports shows that there is no general failing in the marketplace and that the increase in premiums has not been universal across the board. The analyses also show that, by and large, insurance is available, although at a price, and the further work is intended to try to stabilise the price.

Jobcentre Plus

Judy Mallaber: What the role will be of child care partnership managers in Jobcentre Plus districts.

Andrew Smith: We have appointed child care partnership managers in every Jobcentre Plus district. They work with local authorities, child care providers and employers to ensure that Jobcentre Plus staff can give parents the child care information that they need to enable them to take up work.

Judy Mallaber: I am delighted that Derbyshire's child care partnership manager has just taken up his post. What guidance and help is my right hon. Friend giving to ensure that the necessary information is exchanged, working with the early years partnerships, to fill the gaps in provision for parents who seek to take up employment? Will he undertake to consider how Jobcentre clients themselves can gain access to some of the new opportunities to enter child care as a profession?

Andrew Smith: Yes. My hon. Friend has very succinctly summarised the new Jobcentre Plus child care partnership managers' remit, which is specifically to work with the early years development partnerships in the way that she suggests to ensure a good flow of information between all the parties necessary, so that there is improved child care provision, as well as improved rates of movement into jobs. Yes, they will specifically work to ensure that a greater proportion of Jobcentre Plus clients can fill the expanding number of vacancies in the child care sector.

Pension Credit

Ann McKechin: What progress his Department has made towards the introduction of the pension credit.

Maria Eagle: Good progress. The Pension Service has already written to those in about 1.8 million pensioner households who currently receive the minimum income guarantee to tell them that they will automatically transfer to pension credit. This month, 45,000 mail packs a week are being set out, inviting pensioners to apply before October and advance applications are now being taken on a freephone application line.

Ann McKechin: I thank my hon. Friend for her reply. I welcome the introduction of the new pension credits, which will benefit many constituents in my area, but, as she will be aware, a significant number of elderly people are unable to look after their financial affairs, so what discussions has she had with the Convention of Scottish Local Authorities and the Scottish Executive to ensure the maximum take-up of that very valuable benefit?

Maria Eagle: I have had no such discussions, but the Pension Service is involved in discussions about take-up throughout the country with local partners, local government and the Scottish Parliament. We are anxious that as many people as possible take up their entitlement to pension credit, not least because, for the first time, it will provide a reward for saving instead of penalising it, and those pensioner households who are entitled will receive an extra £400 a year on average.

David Willetts: With the greatest respect to the Minister, can I tell her and perhaps the Prime Minister how much we have missed the ebullient presence of the former Minister for Pensions during Question Time today? Does she think that not having a Minister for Pensions has had any significant effect on the performance of her Department?

Maria Eagle: Well, of course, we are all working hard, as one might expect, to make up for the work load of my right hon. Friend the former Minister for Pensions, who was well known in the Department for working from noon—[Interruption]—from morning till noon, till night, day in, day out, so I can assure the hon. Gentleman that things have not been easy, but I hope that no one will have noticed my right hon. Friend's departure; that has certainly been the aim of those of us seeking to cover his efforts.

Louise Ellman: Does my hon. Friend have any plan to run take-up campaigns for pensioners generally? What assessment has she made of Age Concern's recent survey, which shows that pensioners in Liverpool are among the poorest in the country?

Maria Eagle: My hon. Friend is right. We have plans with all our local partners, including Age Concern, to maximise the take-up of pension credit entitlements. We want to ensure that all those who are entitled take up pension credit. To the extent that our local partners, such as Age Concern in Liverpool, can help us to achieve that, we will work very closely with them to ensure that people do so.

Income Support Fraud

Edward Leigh: What effect the human resource initiatives outlined in the Government's response to the Public Accounts Committee's 55th report of Session 2001–02 on fraud and error in income support had in reducing the variations in performance between local offices.

Malcolm Wicks: We are continually striving to improve our performance in tackling fraud and error. As the latest results cover only the period up to March 2002, it is too early to gauge the impact of training and other measures on reducing performance variation across regions. Overall, we are making excellent progress in tackling fraud, having reduced it by 24 per cent. against income support and jobseeker's allowance since 1998—a saving of £230 million.

Edward Leigh: Is the Minister proud of the fact that year after year the Comptroller and Auditor General qualifies the accounts of his Department because of gross inaccuracies in them? We are in the 13th year of its accounts being qualified. One of the reasons for these inaccuracies is the level of experience and high turnover of staff, particularly in London and the major cities, where inaccuracies are twice the national level. What is he doing to rectify this situation?

Malcolm Wicks: We are not proud of that, we are working hard with the National Audit Office to move away from it, and I recognise the seriousness of the hon. Gentleman's point. On the main question, however, I am proud that we are winning the war against the fraudster and saving the public's money: money that the public want spent on education and hospitals and not on crooks and criminals.

Economic and Monetary Union

Gordon Brown: With permission, Mr. Speaker, I should like to make a statement. For many decades, Governments formed from parties on both sides of the House have made the case for Britain's engagement in the European Union. It is right that at every point we show that every decision that we make on Europe is made in the British national economic interest.
	Today, therefore, I will set out the following: first, the economic context for the euro decision; secondly, the case in principle, in the national economic interest, for membership of the euro; thirdly, the detailed conclusions of our assessment; and finally, the policy changes that our country must now make.
	Let me start with the economic context. Since 1997, every economic decision of this Government has been designed to build and then entrench stability in order to achieve for Britain high and stable levels of employment and growth. That commitment to put stability first led us to adopt a new fiscal and monetary regime, to make the Bank of England independent, and to cut debt substantially, and it has given us low inflation, low interest rates and low unemployment. That commitment to long-term stability, growth and employment is the foundation of our decisions today.
	Central to the pursuit of stability, growth and employment by Governments of both parties has been our membership of the European Union. Our assessment shows that Britain's trade with the European Union has grown from just over 40 per cent. of our total trade when we joined to 55 per cent. today.
	Membership of the European Union is central to stability, growth and employment for another reason. Just as Britain benefits from being part of Europe, so, too, Britain stands to benefit from an enlarged Europe that is more integrated in the global economy—globalisation increasingly moving Europe away from an exclusive trade bloc to a Europe that must look outwards, not least to the USA, and a Europe that, to meet global competition, must liberalise and reform.
	Therefore, in addition to our decisions that I will announce on the euro today, we will also make proposals that, by reducing tariffs, regulatory and competition barriers to European Union-USA trade, will fulfil our objective of a fully effective transatlantic economic partnership between Europe and the USA. Following the joint declaration of all EU Finance Ministers placing, for the first time, labour market flexibility and structural economic reform at the heart of the new economic policy guidelines for Europe, the Government will later this week publish our further proposals for economic reform in Europe.
	I have no doubt that an enlarged Europe pursuing, like Britain, economic reform, and, like Britain, modernising fiscal and monetary policies, will be conducive to British stability, growth and employment. I believe that, around that, a modern pro-European consensus can be built in Britain.
	It is in this context—with stability the foundation and our membership of the European Union central to our economy—that we must decide whether joining the euro now is in the national economic interest. It is a decision of far-reaching consequence. Indeed—because it is irreversible—it is one of the most momentous economic decisions our country has to take, and it is one that must contribute to the attainment of stability, growth and employment.
	When, in 1997, I set out the Government's position, I listed the potential benefits for Britain of a successful single currency in transparency of costs, currency stability and in trade and long-term interest rates. The detailed work set out in the background papers published this morning allows us to set out these benefits with even greater precision.
	The first benefit is lower transaction costs for business and consumers. We estimate these as worth around 0.1 to 0.2 per cent. of GDP—£1 billion a year—with the gains greater for small companies and the gains permanent. The second is diminished exchange rate volatility, with gains for both large and small companies especially in the manufacturing sector with, again, potentially the greatest gains for the smallest companies. The third benefit is greater cross-border trade and thus the potential for increased commerce and growth.
	Our assessment makes it clear that, with the advent of the single currency, trade within the euro area has already expanded and that, with Britain inside the euro, British trade could increase substantially with the euro area—perhaps to the extent of 50 per cent. over 30 years.
	I come next to interest rates. For 30 or 40 years, continental Europe has been able to combine stability with consistently lower interest rates than in Britain, to the benefit of both business and, of course, homeowners. Indeed, over the last 30 years, interest rates in Britain have had to be, on average, 3 per cent. higher than in Germany.
	With Britain in the euro, business could benefit through greater access to a more integrated European capital market. And if, on the basis of sustained and durable convergence, we could lock in stability for the long term, business could see a cut in the cost of borrowing on a sustainable basis with a long-term boost to cross-border investment flows and to foreign direct investment in the UK.
	So I can today confirm the principled case: our view that membership in a successful single currency would be of benefit to the British people as well as to Europe is strengthened by the results of our assessment.
	While we argue the case in principle for joining, there are those who would rule out joining the euro for ever as a matter of dogma. They would rule out joining the euro even if it was in the best economic interests of our country. And that cannot be right for the future of Britain.
	The Government's view is that, if the economic case is clear and unambiguous, then the constitutional issue, while a factor in the decision, should not be a bar to entry. And my conclusion is that if, on the basis of the five economic tests, membership of the euro is shown as good for sustaining British jobs, British business and British future prosperity, then it is economically right and in the national interest to join.
	Indeed, our assessment on trade and output is that, inside the euro, UK national income could grow by a quarter of a percent a year, boosting, subject to convergence, potential output and national wealth. That is worth up to £3 billion extra a year, delivering higher living standards and lower prices for consumers and households.
	Just as there are risks of joining before a clear and unambiguous case has been demonstrated, so too there are risks in delaying these potential benefits once sustainable and durable convergence has been achieved. So from the assessment we have done, I have also no doubt about, first, the potential benefits to Britain and the British people of joining; secondly, the potential risks of delaying the benefits of joining; and, thirdly, the advantages within the euro area of greater influence over policy towards the euro and thus Europe.
	Provided the crucial tests are met concerning the British economy, it is our intention to join. If on the basis of the tests we can make a clear and unambiguous case, this Government's view is that it is in the national interest to recommend to the British people to vote yes in a referendum to join the single currency. In short, if the economics are right for Britain, we should join.
	So let me turn to the conditions that have to be met if we are to secure the potential benefits of the euro. We must be sure that there is cyclical and structural convergence between Britain and the euro area and be sure that there is flexibility to withstand stresses and strains. Indeed the more flexibility in the economy, the easier it is to tackle problems that arise from the divergence of business cycles.
	Sustainable convergence means that the British economy can live on a permanent basis with euro area interest rates, able to advance our objectives of high and stable levels of growth and employment and sustained and stable funding of our schools, hospitals and other public services. The flexibility required is, as I said in 1997, sufficient flexibility to be able to adjust our economy quickly to any shocks that arise so that we do not put at risk these objectives.
	So it is my duty to demonstrate in detail whether we have secured for Britain convergence, which is compatibility with our European partners that is sustainable—the first test—sufficient flexibility, the second test, and whether we can affirm conclusively and confidently to the British people that the potential benefits for investment, financial services and employment, growth and trade—the other three tests—are indeed realised.
	The five tests are our stability guarantee: to meet them would ensure that we would not put at risk our economy or our public services. With the tests met, Britain in the euro can enjoy the benefits that I have outlined: greater trade, investment and employment. If we entered with the tests not met, at the wrong exchange rate, then just as with the exchange rate mechanism, we could see unemployment rise, public service investment fall and growth stall. The discipline of the five tests is to ensure that there will be no repeat of the experience when Britain joined at the wrong rate and at the wrong time, without either convergence or flexibility, and the potential benefits could not be realised.
	In our 1997 assessment, we took the view that a period of stability was required to ensure that business cycles and structures converged sustainably and durably. We concluded that UK interest rates were higher than in the euro area and remained higher because of structural differences, particularly in the housing market.
	The new assessment that we publish today also shows that because of a lack of convergence with the euro area, joining in 1999—as some in this House advocated—would not have secured the stability inside the single currency that we have enjoyed outside it.
	Cutting interest rates substantially to join the euro below the level that would have been right for Britain, and joining at an exchange rate that was too high for the long term, could have locked us into another cycle of stop/go economics. But I can tell the House that the consistent polices that we have pursued since 1997—an independent bank, new fiscal rules, lower debt, housing market reform and greater flexibility in labour, capital and product markets, including an independent competition commission—have contributed to meeting, quite comfortably, the Maastricht criteria for nominal convergence in a better position than some members were in 1997 and even are now, and are also leading toward the sustainable convergence and greater flexibility required by the five tests.
	We can report that since 1997 there has been significant progress in achieving cyclical convergence. The short-term interest rate divergence between Britain and the euro area has fallen from 4 percentage points to 1.75 percentage points. Long-term interest rates have virtually converged at around 4 per cent. Over the last six years, there has been a weaker euro and a stronger pound. And the inflation rate has been on average 1.1 per cent. below the eurozone average for the last three years.
	Over recent months, the euro exchange rate has strengthened against sterling and the dollar, and we are today publishing an independent study examining the sustainable level for sterling reflecting economic fundamentals.
	The issue at the present time, however, is being sure that there is structural convergence that is sustainable for the long term; and we also have to be sure that, if real interest rates or business cycles diverge, Britain will have the necessary flexibility to sustain growth and employment.
	We do not know whether or how shocks will occur, but there are risks for the UK, and let me give the House two specific examples—one from housing, one of inflation generally—of how in the new circumstances we would need to respond.
	Take the challenge of an inflation rise particular to Britain from, say, the housing market. For a 1 per cent. rise in British inflation, the British interest rate would, other things being equal, tend to rise by 1.5 per cent. The real interest rate—that is, the interest rate after taking account of inflation—would therefore rise by 0.5 per cent. as we brought inflation under control and back to its target.
	Inside EMU, Britain's economy would be one fifth of the euro area economy. A 1 per cent. inflation rise specific to the UK which would today lead to a British interest rate rise of around 1.5 per cent. would lead to a euro area interest rate rise of about a third of a per cent.—a real interest rate fall for the UK of around two thirds of a percent. As a result, real interest rates for Britain which ought to increase could actually decline. And it is for this reason that, inside the euro, Governments need other forms of flexibility. If inside the euro Britain's inflation rose faster than that of the euro area, Britain would suffer a loss of competitiveness. So to restore lost competitiveness, a period of higher inflation than the euro area would have to be followed by a period of inflation lower than the rest of the euro area.
	These two examples show why it is important to learn the lessons not just from the experience of the euro area but also from how states and regions adjust flexibly in the United States monetary union. In other words, we must be sure of sustainable convergence and that if business cycles do diverge or shocks arise, Britain has the price and wage flexibility—and the fiscal flexibility—to ensure stability.
	Our assessment finds that obstacles to convergence do not lie in the provision of small business finance or large company finance, where, in fact, overall on business finance, the UK economy is found to be not more interest-rate sensitive than others.
	The issue in housing, where we are more interest-rate sensitive, is not the attainment of identical market structures for housing with other countries—all countries have unique features of their market—but the fact that to deliver stability in Britain, the combination of house price inflation and volatility, and the impact of both on consumption, has generally led to interest rates higher than in other countries.
	Indeed, most stop/go problems that Britain has suffered in the last 50 years under Governments of all parties have been led or influenced by the housing market. The volatility of the housing market and its potential for higher inflation is a problem for stability that we are determined to do more to address to produce greater stability and reduce the risks of inflation irrespective of the decision on the euro.
	Because Britain has experienced difficulty in balancing supply and demand in housing, we propose to build on and extend the reforms already announced in respect of planning and supply. That includes simpler planning guidance, the speeding up of decisions, reserve powers to call in applications and the case for binding local plans—and, having asked Kate Barker to conduct a review of issues underlying the lack of supply and responsiveness of housing in the UK, we will bring forward further proposals in the pre-Budget report and Budget on how we can produce greater stability in the British housing market. And because Britain has had a different system of housing finance—just 7 per cent. of mortgages in the UK are at long-term fixed rates—we are learning the lessons from other countries where, for example in America, they securitise long-term fixed rate mortgages, and an independent review is now examining the structure of mortgage finance including the case for, and how we can help the development of, the long-term fixed rate mortgage market in the UK.
	So further housing reforms will be put in place in the coming year—reforms right in any event for the British economy—that will help to ensure that by having a reduced propensity to house price inflation, which is in everyone's interest, stability can be further entrenched.
	It is also right to consider a further change that is right in itself and will foster convergence—that is, a new target for domestic inflation. The advantage of the current indicator of inflation—RPIX—is that it is known, well understood and has served us well. The advantage, however, of the internationally recognised index of consumer prices is that it is a better measure, it will improve the quality of our target, it is in line with best international practice, and it is used by every other G7 nation except Japan and by all our neighbours in Europe.
	I turn from issues of convergence to issues of flexibility. To strike the right balance between fairness and flexibility in the pursuit of full employment, we have introduced a minimum wage and a tax credit system, which guarantees a national minimum income for single persons and couples over 25 and for families. So no one should fear that when they move areas or move jobs, they will lose those national income guarantees.
	With this national framework for fairness in place, it makes sense to recognise that a more considered approach to local and regional conditions in pay offers the best modern route to full employment in our country. In addition, in the south-east, where professionals have benefited from London weighting and other arrangements, many low-paid workers have missed out. So in future we plan to publish data on regional prices and inflation; remits for pay review bodies and for the public sector, including the civil service, will, within their nationally determined frameworks, include a stronger local and regional dimension; and the reform of housing benefit will remove disincentives to work or to move. These measures—which will be put in place over the coming year—can make Britain, with already the lowest unemployment of all the main industrialised countries and 1.5 million more jobs since 1997, the most employment friendly country in the world.
	The other form of flexibility is fiscal flexibility. Because of our history of stop/go, prudence dictates a cautious approach. Some countries have proposed new domestic procedures for faster and more effective adjustment of their fiscal policies inside the euro area. In the principles that we have applied to British monetary policy—to ensure stability and flexibility—we have insisted on clear symmetrical rules, well understood procedures, and enhanced transparency. Central to that is the open letter system, which is a means for dealing with potential pressures. To promote stability and flexibility in future, the same principles should be applied to any new arrangements for British fiscal policy inside EMU.
	To ensure stability inside the euro area we will consult on the case for an open letter system on fiscal policy and a new and additional fiscal rule. We propose a regular fiscal stability report published on a pre-announced timetable to Parliament, ensuring that fiscal decisions are fully transparent and accountable and that they are made by Parliament; an assessment in the report of the gap between actual and trend output in the economy; and when actual output materially diverges from its trend, an open letter sent by the Treasury to Parliament setting out the Government's response. In that way, inside EMU, the principles underlying our monetary policy regime, which has been successful in delivering stability, would be mirrored in a similar fiscal policy regime.
	Let me give the conclusions on each of the five tests, the full details of which, the benefits and the challenges, are set out in the Treasury's assessment published this afternoon and in the 18 documents published this morning, which cover in an open and full way all aspects of British economic policy, all of which are now available for open public debate.
	With regard to convergence, on long-term interest rates we have made significant progress in lowering inflation expectations and establishing a platform of stability. There are grounds too for optimism about increasing compatibility of business cycles and market structures. Today, interest rates, which were 4 per cent. above those of the euro area, are 1.7 per cent. higher. Structural differences remain that could pose a risk to stability unless addressed, which they are by the proposals I will put forward today.
	On flexibility, the assessment shows that considerable progress has been made to reform markets in the UK and euro area. Flexibility—right in itself for every economy—has improved in the British and European economies. The more flexibility in the economy, the easier it is to deal with problems when cycles diverge, and the better it is for our competitiveness. Yet as the persistence of volatility in inflation rates within the euro area demonstrates, we cannot be certain that there is as yet sufficient flexibility to deal with the potential stresses. It is for these reasons that we are making structural reforms that will bring increased flexibility to our economy.
	On investment, the assessment shows that inside the euro there will be new opportunities for investment, particularly for foreign direct investment. At all times, by continuing to maintain macroeconomic stability and encouraging flexibility, the Government will continue to ensure that the UK retains our position as a magnet for foreign direct investment. We have taken particular account of the views, indeed the qualitative evidence, from Japanese, and other Asian, American and European investors, many of whom have said that membership would be beneficial and is important to them. There can be confidence that on the basis of sustainable and durable convergence, a successfully operating EMU and UK membership of it on the right terms would boost investment and foreign direct investment over the longer term.
	On financial services, the assessment shows that in or out of the euro, UK financial services, wholesale and retail, are and will remain competitive. Future integration of financial markets inside the euro could promote the kind of diversity, flexibility and risk diversification seen in the capital markets of the United States of America, therefore making it easier for a more flexible Britain to win business throughout the euro area.
	On employment, stability and growth, the fifth test, the potential benefits in increased trade and competition, and then in higher long-term levels of output and employment, are significant. Without sustainable convergence and sufficient flexibility, we would not realise the potential benefits for stability, jobs and investment.
	It is because we will never put stability at risk that the tests we set were, and indeed are, high ones: namely, to show a clear and unambiguous case for British membership. So we conclude that the financial services test is met. We have still to meet the two tests of sustainable convergence and flexibility. Subject to the achievement of sustainable convergence and sufficient flexibility, the tests for investment and employment would be met.
	So I am today announcing major reforms, right for the British economy: reforms that will be implemented over the next year and will greatly assist the process of achieving sustainable and durable convergence and the flexibility necessary for Britain to succeed sustainably within the euro zone and realise the potential for trade and investment.
	Under Bank of England legislation, it is my duty to set the inflation target. I have written to the Governor of the Bank of England today stating that, subject to confirmation at the time of the pre-Budget report, I intend to change the inflation target at that time. The inflation target for Britain will be set on the consumer prices definition. I can confirm that pensions and benefits and index-linked gilts will be calculated on exactly the same basis as now. We have said throughout that we do not believe it necessary or right to rejoin the exchange rate mechanism.
	I am asking by the time of the pre-Budget report for interim reports on the step changes we need in the planning and supply of housing and on the market for long-term fixed rate mortgages. I am today publishing for consultation our proposals for a new system within EMU of fiscal reporting to Parliament.
	As part of radical reforms at a national, regional and local level, I propose that by next year almost all pay remits for public sector bodies will include a regional or local pay dimension. We will publish six-monthly reports on trends and progress in flexibility in labour, product and capital markets.
	At this particularly uncertain time for the world economy—with adjustments only recently in the exchange rate—and when we do not know the future path of growth and inflation rates in Britain and Europe, it is right, prior to the point of transition and in the light of progress, to consider both the exchange rate and the balance of monetary and fiscal policy.
	We will also continue to pursue our objective of a stability and growth pact that takes into account the economic cycle, debt sustainability and public investment, and we will seek reform of the European Central Bank. It is important that we resolve the uncertainties over the European Convention, and we will continue to pursue successfully our objective of tax competition and reject tax harmonisation in Europe. We will report back on progress in all these areas of reform in the Budget next year.
	It is this resolve to implement far-reaching reforms in our economy that is the practical and best expression of our intent. It is a reform agenda that is right for Britain's economic interest and right to help meet the five tests: a reform agenda on which I believe there is a realistic prospect of making significant progress over the next year.
	The Government believe that the implementation of these reforms, right in themselves, would help towards sustainable and durable convergence and flexibility, so that we can, within the euro area, achieve high and stable levels of growth and employment and deliver our objectives for public services.
	We will report on progress in the Budget next year. We can then consider the extent of progress and determine whether on the basis of it, we make a further Treasury assessment of the five tests, which, if positive next year, would allow us at that time to put the issue before the British people in a referendum.
	I can announce the publication of the draft referendum Bill this autumn; the introduction of further paving legislation for additional departmental allocations for preparations, and the publication today of the full and complete version of the British national changeover plan, which sets out the possible timetable for a changeover, its management, and the impact on consumers, business, financial services, the voluntary sector and the public sector.
	I propose Scottish, Welsh and Northern Irish preparation committees, which will examine local, regional and sectoral preparations. I am also asking representatives from consumer organisations, local authorities, the voluntary sector and the regional development agencies to join the standing committee on euro preparations.
	I will publish a detailed report on euro preparations in government, the public sector and across the economy this autumn. I will shortly issue guidance to local authorities on preparation. The publication of the changeover plan will lead to a period of information and discussion in each region and nation of the country, including in each constituency.
	So, in this statement, we strengthen our commitment to and support for the principle of joining the euro and show that the gains to the country and to our businesses are greater than anticipated.
	We have shown how financial services would benefit from membership of the euro. We have shown how, with sustainable convergence and flexibility, investment can benefit from membership of the euro. We have shown how, with convergence and flexibility, employment can benefit from membership of the euro. We have also shown the critical importance of achieving sustainable and durable convergence, and I have announced major reforms to be implemented in the next year.
	At all times, we have and will put stability and the national economic interest first. We have set out the real benefits to Britain of membership of the single currency; we have shown that, with the achievement of sustainable convergence and flexibility, all five tests could and can be met. We have also laid down the concrete and practical steps that we will follow.
	Those radical steps set out a new direction for reform and the clear path ahead for Britain. With a programme of economic reform benefiting Britain, I believe that a modern, long-term and deep-seated pro-European consensus in Britain about Britain's role in Europe and Europe's role in the world can and will be built in our country.
	I commend the statement to the House.

Michael Howard: I draw attention to my declaration in the Register of Members' Interests, and acknowledge that the 1,738 pages of background papers—not the Chancellor's statement or assessment—were made available at 9 am this morning. The Chancellor generously gave us six and a half hours to read them, in sharp contrast to the 480 hours that he gave his Cabinet colleagues. I am not sure whether that reflects the Chancellor's contempt for the intelligence of his Cabinet colleagues or his admiration for the intellectual abilities of the rest of the House.
	The
	"time of indecision is over."—[Official Report, 27 October 1997; Vol. 299, c. 588.]
	The Chancellor said that about the euro six years ago. He said that it was time to "establish clear national purpose", to show "economic leadership" and to "make . . . hard choices". He said that divisions led to "indecision" and "inconsistent and unclear" policy. How refreshing it must be for the British people, after hearing those words, to see the Chancellor and his colleagues producing such decisiveness, clarity and leadership.
	To be fair, Ministers are speaking with one voice today. They are united in common purpose, with only one objective: to paper over the cracks that have riven them in the past few weeks. Is it not clear from any objective reading of the evidence, including the 18 volumes that we have been given today, that joining the euro would damage our prosperity, destroy jobs and lead to an irreversible—the Chancellor's word—loss of control over our economic policy? That is certainly our view; it is also the view of the clear majority of the people of this country.
	Today's statement is not the result of any real assessment of Britain's national economic interest. It is a result of the frantic efforts by the Chancellor and the Prime Minister to cover up their differences. After all, that is why the five tests were thought up in the first place. We all know that they were written on the back of an envelope in the back of a taxi to fix the damage done by the Chancellor's spin doctor in the back of the Red Lion pub. It was a four-pint briefing, which led to a five-point plan that has just given us a six-year runaround. And what a runaround it has been.
	Ministers could not even agree on what question they had to answer. The Leader of the House—that rogue element in the Cabinet—said that the five tests were to determine when we should join the euro; three days later, the Foreign Secretary said that they were to determine whether Britain should join. The Secretary of State for Scotland has said that there should be a sixth test. The Chancellor said that the economic assessment would be decisive. The Prime Minister's spokesman said that an assessment was not a decision. Indeed, the Prime Minister was so determined that the Treasury view would not prevail that he thought the unthinkable: he suddenly saw the merits of Cabinet decision making. There is a first time for everything.
	The Prime Minister will pay any price to do down his Chancellor. There they sit, united in rivalry, each determined to frustrate the other, to scheme against the other and to do the other down. So there is no clarity in policy and no consistency of purpose, and each of them is the loser. The Chancellor is losing, the Prime Minister is losing and, much more importantly, the British people are losing. The Government's ability to deliver has broken down on health, on education and now on the euro. Blair goes one way, Brown goes the other way, and bang goes the third way, lost in conflict, compromise and confusion. No wonder so little ever gets done under this Government. That is the price that we are paying for the fault line at the heart of this Government.
	What a humiliation today's announcement is for the Chancellor of the Exchequer. Was it not he who said that there was no reason to keep the question open or to look at it again in this Parliament, that there was no need for another assessment and that we certainly should not have a referendum in this Parliament? He told us again today, as he did in 1997, that the results of the tests would have to be clear and unambiguous before we could join, but the permanent secretary to the Treasury has told us that the economics can never be clear and unambiguous, and the incoming Governor of the Bank of England has said that we would need 200 or 300 years of data to find out whether business cycles have converged.
	What would have happened if the 18 volumes of data that we have been given today had shown that the tests had indeed been passed? How on earth are we to know whether a similar assessment next year, or in five or 10 years' time, would reach a similar conclusion? If the data change in one direction, how can anyone know that they will not change back again? If, at any particular moment in time, our growth rate, inflation rate or interest rates are at similar levels to those in the eurozone, how do we know whether that convergence is permanent? Might it not be because our economies were like ships that pass in the night, coming together for a moment before moving off in different directions?
	The Chancellor predicted that trade with the European Union could grow by as much as 50 per cent. over 30 years. Will he confirm that his own Department's reports conclude that improved levels of trade are totally dependent on sustained convergence, which has not been achieved? Will he confirm that other economists have challenged his conclusion in the academic studies published today by the Treasury? Will he confirm that the author of one report that supports his assertion points out:
	"any extrapolation of my results to EMU may be inappropriate since most currency union observations are for countries unlike those inside euroland"?
	Will he confirm that that expert's assumptions, on which the Chancellor relies, are based on studies of currency unions involving Angola and Mozambique, Burkina Faso and Chad, Vatican City and San Marino, and Tuvalu and Tonga? The Prime Minister is obviously surprised by that. It is one of the reports that he had not got around to reading.
	In 1997, the Chancellor said that the most critical test was convergence, and today he was forced to admit that it had been failed. One of the Chancellor's documents is succinctly entitled "Analysis of European and UK business cycles and shocks". Its conclusion in paragraph 9.2 is clear: the UK cycle is more strongly correlated with that in the United States than with those in Europe. Indeed, not a single UK region is strongly associated with the European cycle. Astonishingly, there was no mention of that in the Chancellor's statement.
	That is just one example of the gloss that the Chancellor has tried to put—the gloss that he has been obliged to put—on the studies that he has published today. He has given us his solutions, which are the solutions that we always get from this Government when the evidence does not suit their case: change the evidence, fiddle the evidence, distort the evidence. If the mortgage market in this country differs from that in the eurozone, change it, whether or not that is in the interests of British home buyers. If the inflation index in this country differs from that in the eurozone, change it, whether or not that is in the interests of British monetary policy. Perhaps the Chancellor will tell us what independent advice he has taken about the abandonment of the retail prices index. He has a Retail Prices Index Advisory Committee; perhaps he will tell us whether he took its advice before abandoning the RPI.
	How would either of those changes affect the conclusions of the Treasury's assessment, "Housing, consumption and EMU"? Paragraph 8.10, on page 86, states:
	"deviations in UK interest rates from their appropriate level could lead to particularly large swings in the housing market . . . and hence in the wider economy in the UK".
	It is true that the document on fiscal stabilisation suggests, in paragraphs 6.89 and 6.92, that fluctuations in the housing market might be damped, and sets out how they might be damped by an increase in stamp duty or by charging capital gains tax on residential property. Perhaps the Chancellor will tell us whether that is what he had in mind. Is he suggesting that the choice for this country, in the euro, would be between even higher taxes and even more boom and bust? [Interruption.] Yes—more boom and bust.
	The Chancellor has been forced to admit that the flexibility test has been failed as well. Indeed, according to his own assessment of the flexibility test, inflation volatility is very likely to increase inside the euro. Perhaps he will tell us whether that is why he is going to such lengths to make our economy less flexible. Perhaps he will also tell us what grounds he has for thinking that the test is more likely to be met by the time of next year's Budget, or in a year's time.
	What of investment? Only last week Ernst and Young said that Britain's share of inward investment projects for the EU rose last year. It described euro membership as a
	"bit of a damp squib as far as inward investors into Europe are concerned".
	It is not surprising that the Chancellor has been forced to admit that that test too has been failed; but what grounds has he for supposing that it is likely to be passed by the time of the next Budget, or next year?
	What of financial services in the City? Far from the City having been hit by Britain keeping the pound, the Bank of England says:
	"The evidence indicates that, since the launch of the euro, the City has maintained its market share."
	Why? As the Bank of England says:
	"The City is a global financial centre, and not just a European centre."
	That conclusion is reinforced by paragraph 7.8 of the Treasury study, "The location of financial activity and the euro." Why, in the face of all the evidence, does the Chancellor insist that this test has been passed? Will he reassess it this time next year, or are the test results allowed to change only in one direction?
	It is no surprise that the final test on jobs has been failed. At the moment, we can choose to have the same interest rates as the eurozone when that suits our needs. Why on earth should we be forced to do so when it does not? Why on earth should we accept the straitjacket of a one-size-fits-all interest rate when it is not the right rate for our economy? Competitiveness would be lost, growth would be hampered, jobs would be put at risk, and that will be just as true at the time of the next Budget and in a year's time as it is today.
	Other countries have discovered these truths the hard way. As a former director of the Bundesbank said yesterday:
	"The present Eurozone structure is devastating for Germany. And I am convinced the UK would be crazy to join—you should stay out for as long as I can foresee."
	Is that not what we found with membership of the exchange rate mechanism? The Conservative party has learned its lesson from the experience of fixed exchange rates, but the Government have not, despite the fact that the present Chancellor of the Exchequer was calling for early entry to the ERM almost a year before we joined.
	Today, the national economic interest took a back seat. As the Government dither, uncertainty is maximised. What does the Chancellor say to business leaders, such as the director general of the CBI, who said:
	"The last thing we want is an annual reassessment."
	David Frost, the director general of the British Chambers of Commerce, said:
	"once the Euro verdict is announced, business would expect a period of stability on this matter for at least three years."
	Ruth Lea of the Institute of Directors said:
	"We need to know where we stand."
	This is the Government who in opposition promised not to be "de-railed by . . . internal bickering" on Europe. This is the Government whose election manifesto in 1997 pledged that Labour would make a hard-headed assessment of Britain's economic interests rather than be "riven by faction". This is the Government who promised to "prepare and decide", but now it is not prepare and decide, it is not wait and see, it is just hope and pray. Today, they have not put off a referendum because they are against joining the euro, or because they think it will damage the national economic interest. They have not put off a referendum out of conviction. The only reason we are not having a referendum now is that they know they cannot win it.
	Today's statement comes from a divided Government—a Government on the run. This whole exercise has been an exercise in deceit: the deceit that they had the national economic interest at heart; the deceit that they wanted an objective assessment of what this country needs; the deceit that they were united. It is time for an end to the deceit. It is time for an end to the duplicity. This is not the end of the beginning for this Government. It is the beginning of the end. The sooner it ends the better it will be for the national economic interest and for the British people.

Gordon Brown: When, by his own admission this afternoon, the shadow Chancellor was in the ERM Cabinet and was the Secretary of State for Employment who lost 1 million jobs, how can he come to the House to lecture us about economic stability and putting the national economic interest first? The Conservatives joined the ERM with no assessment of investment, no assessment of jobs, no assessment of financial services and no assessment of home owners. Interest rates were at 15 per cent., inflation was at 10 per cent., 1 million jobs were lost, 1 million were in negative equity. Set that against our record, which is the lowest interest rates for 40 years, the lowest inflation for 30 years and economic stability, which they failed to achieve.
	When the shadow Chancellor tries to give us his balanced account of the studies that were produced this morning, he fails to mention the benefits in transaction costs. He fails to mention that 55 per cent. of our trade is with the European Union. He fails to mention that we have 3 million jobs dependent on the European Union. He fails to mention the estimates of an increase in output as a result of membership of the euro. He fails to give a balanced account of the national economic interest. The reason for that is that he is against the euro on grounds of dogma, even if it is in the national economic interest to join. Even if it were good for jobs, he would refuse to join. Even if it were good for investment, he would refuse to join. [Interruption.] Oh, yes. He said in 1997 that he was against the euro in principle. When he was asked for his dispassionate judgment using the non-prejudiced mind of a lawyer, he said that it would be crazy to join. Far from being open to argument and debate, far from being prepared to look at the studies dispassionately, all he wishes to show is that, to his prejudiced mind, we should not join the euro at any time, ever.
	I heard the shadow Chancellor on television yesterday morning. He called for a referendum on the euro immediately. When he was asked whether he would abide by the result of the euro referendum, he could not give a straight answer, so we know what the agenda of the Conservatives is. When the Leader of the Opposition was on the Frost programme yesterday morning and was asked whether he would be staying in the European Union, he could not give a straight answer either. They do not want just to stay out of the euro. They want to get out of the European Union. It is time that we fought the prejudices and the myths of the anti-Europeans on the Conservative Benches and built a pro-European consensus in this country.
	On housing and taxation, I do not think that we on the Labour Benches can take any lectures from the party that put up VAT on repairs from 8 to 17.5 per cent. Nor can we take a lecture from the party that put VAT at 17.5 per cent. on house extensions. Nor can we take a lecture about the use of a regulator from the party that when in government used a stamp duty regulator in the early 1990s. If the shadow Chancellor does not believe that volatility and instability in the housing market is not a cause for concern that should be dealt with, again, he is failing the national economic interest.
	The shadow Chancellor asked whether all the five tests would be reassessed next year. As I said in my statement, if he had heard me properly, the answer is yes, if the review in the Budget says that we should have an assessment. It will be an assessment of all the five tests. As regards the figures for investment, the shadow Chancellor, again to make his point that he is against the euro in principle, quotes selectively from one set of figures about projects, when the published figures for last year show that there are issues to be dealt with in terms of inward investment, and that is what we are doing.
	What the shadow Chancellor and the whole of the Conservative party have revealed by their failure to take these issues seriously today is that, when it comes to the question of stability and instability, we are the Government of stability, they have no policy to avoid instability. When it comes to a positive attitude to Europe, we are the party of Europe, they have shown themselves to be wholly against Europe. When it comes to issues of the future, we are the party of the future, they are the party of the past. They spent 18 years in government. They will spend 18 years now in opposition.

Matthew Taylor: It was nice to see the Chancellor return to form in responding to the Conservatives, and it was noticeable how confident he was in doing that. He was rather less confident in presenting his own policies, perhaps because there may have been a return to form there; saying no but dressing it up as a warm "almost yes", as if we were poised at any moment to join.
	Two assessments, three national changeover plans, 18 studies, 2,000 pages, endless spin; but still we have indecision. The Chancellor said that it was prepare and decide. Actually, for the Prime Minister, it was wait and see, and the Prime Minister still has to wait and see. I take it that the Chancellor remains the guardian of the tests. Yet he says that he is in favour of the principle of joining, and today's studies show why.
	Joining the euro means more growth and better-paid jobs, on every range of assumptions. It could save an average mortgage payer £15,000 over a 25-year mortgage—£50 a month. It would mean lower prices and the end of rip-off Britain: televisions, computers, mobile phones, perfumes, shampoos, toothpaste and even chips are cheaper in France and Germany. That is why three out of the five tests clearly have been passed—jobs, investment and the City.
	As for convergence and flexibility, there are now three positions on the euro. "Never join" is the Conservatives' position, which would make the economic assessments irrelevant. There would be a long response, but no point to it; the assessment would not matter, as we would know the Conservative's answer: "We will not join the euro ever, no matter the economic consequences for this country."
	The second option is "wait and see", the old Conservative position and the policy of the last Conservative Prime Minister. In truth, it has been the position of the Chancellor over the last six long years, too. However, that left the Government taking no action for six long years while our share of investment fell, manufacturing collapsed and rip-off Britain continued to rip off Britons.
	The third position is, "Yes, in principle". That means taking the action necessary to steer the economy towards joining. The last of those has long been the Liberal Democrat position, and, it seems, the Prime Minister's position: to take the action necessary to meet the conditions for joining the euro to give us lower prices, higher growth and the increased jobs and incomes that the euro can bring. We want the Chancellor to take the action to get us there. That is the real test for the Chancellor; it is time for his indecision to be over.
	Having heard all that the Chancellor had to say today, I must ask whether, if he wants the convergence and flexibility that he talks about, he will take the action to get it.Today, the Chancellor's warm words suggest that he will, and we welcome that. But staying out of the euro for so long has already had a cost, in higher prices, lower investment and lower exports. He set out some proposals for action today, but he did the same six years ago and nothing happened. He dressed up no as almost yes and nothing happened.
	Will he clarify the timetable for proposing legislation for a referendum? Will the draft lead to a Bill before the next assessment, or before the Budget? When will we debate and legislate to allow the British people to decide at last? Will he set a target date for a referendum if progress is made by the next Budget? If his assessment at the Budget is to have another assessment—as he announced today—how long will it take for the assessment after the assessment after the assessment? There could be four assessments.
	Will he enter negotiations with our EU partners on terms of entry—particularly the key issue of the exchange rate—before a final assessment and a referendum for the British people, or will they be asked to vote in the dark? Will he take action to end the boom and bust in housing beyond today's announcements, which are no more than a rehash of announcements made in the Budget? Such action is needed to help people in this country afford a home, whether or not we join the euro.
	Just as in 1997, in truth the decision today was no, even if the words were warm. For six years, support in principle from the Chancellor has been all talk and no trousers. The time for indecision is over; warm words are not enough. On the question of whether the Chancellor is going to make progress on the decision—on whether this is really about action—the jury remains out. No wonder that throughout the Chancellor's statement, the Prime Minister looked so gloomy; he clearly has no better idea today than the rest of us about whether the British people will get the chance of a referendum on the euro this year, next year, the year after that, or at any date in the future. Beg my pardon—we do know one thing: the date. It is simply the year that is now missing from the Chancellor's assessment.

Gordon Brown: I am glad that the shadow Chancellor from Truro read more of the background documents than did the shadow Chancellor from Folkestone, although I do not believe that we referred in them to the cost of chips across Europe.
	I agree with the hon. Gentleman that housing reforms are absolutely necessary, whatever decisions are made about the euro, and I hope that his party and others will support us in the reforms that we are introducing.
	The draft Bill on the referendum will be published in the autumn, and there will be paving legislation on expenditures that are to be incurred by Departments for euro compatibility systems.
	On the hon. Gentleman's general point about wishing to join immediately, rather than waiting for the review and the further assessments of the tests, just as the Conservatives never want to join, there has never been a time in the past six years when the Liberals have not wanted to join, whatever the exchange rate, whatever the interest rate and whatever else is happening. Indeed, the leader of the Liberal party, who is missing this afternoon, said that we should have joined on the first date in 1999. If members of his party look at our assessment, they will see that the divergence in interest rates and in the exchange rate from a sustainable level was such that it would not have been right to join in 1999; indeed, it would have ignited the very stop-go problems that we have tried to get away from, and which occurred under the previous Government.
	I hope that the hon. Gentleman will now accept that the five tests and our examination of them are a serious effort to look at all the economic challenges, as well as the benefits ahead. I hope that he will join us in attempting to address the challenges over the next year, and that when we introduce legislation to deal with the problems he will support us.

James Plaskitt: My right hon. Friend will know that in the Treasury Select Committee report that was published in April we highlighted several criticisms of the workings of the monetary policy arrangements in the European Central Bank. I was interested to see that six of those criticisms were reiterated in the policy framework document that was published this morning, so how will my right hon. Friend seek to secure maximum UK influence on ECB reform while we are outside the euro, and does he see convergence on monetary policy management as a precondition of eventual entry?

Gordon Brown: The Government are taking on board and examining very carefully all the points that my hon. Friend makes about the Treasury Committee's report. I applaud the work that he and other members of the Committee have done in identifying the challenges, as well as the benefits, of membership of the euro.
	I define sustainable convergence as the ability to converge with the European area—in other words, that we can permanently live with euro interest rates at the same time as being able to advance our objectives of high and stable levels of employment and growth and the funding of our public services. That is why we are looking at putting in place reforms to the housing market, but we are not trying to seek structures in the British housing market that are identical to those in other countries' housing markets. What we are trying to do is to lessen the inflationary pressures that arise from the housing market. So, on convergence, I believe that we can make significant progress during the next period.
	We will make proposals to the House on how we can create the flexible economy that is necessary to adjust to whatever stresses and shocks arise, so that we can get what I know my hon. Friend wants to emphasise: the potential benefits of the euro in terms of trade, in investment in the financial services industry as a whole, and, of course, in growth and output.

Kenneth Clarke: I welcome the Chancellor's reassurance that he still fully shares my views on the single currency—that it is in Britain's interest to join as soon as the economic conditions are right. I did not advocate joining over the past five years because I believed that sterling was, until recently, overvalued.
	The Chancellor urges us to wait. Am I right that his principal concern over convergence is the housing market, and can he assure us that his studies will not take too long, given that we have the same proportion of owner-occupiers in this country as the average across Europe? We are not the only country with flexible interest rates, and the mortgage market will respond when financial services markets are made universal across the European Union, so we should not wait too long on that account.
	As to flexibility, I have already welcomed what the Chancellor said about the end of national pay bargaining in the public sector, but I trust that he is not going to make us wait until he has achieved that, in the teeth of resistance from his own Back Benchers, before taking a final decision. Surely we are already one of the most flexible economies in the European Union, and, unless he is going to erode our tax and regulatory advantages further than he already has, we should be able to withstand shocks of the sort that he described.
	How near are we to satisfying the tests? Surely we must be very near. I look forward to Budget day next year, when he and I might at last begin to campaign together in support of the views that we hold in common, but that requires some courage of conviction and some exercise of judgment on his part.

Gordon Brown: I am grateful to the former Chancellor for what he said about the benefits of studies of the housing market and issues of flexibility. I believe that he is a late convert to the importance of the five tests. I welcome the fact that we can reach common ground on the problems that need to be dealt with if we are to secure sustainable convergence and flexibility.
	On the housing market, the percentage of owner-occupation is not the issue. As the right hon. and learned Gentleman knows from his own experience—and, let us be honest, as the Conservative party knows to its detriment, from what happened in the late 1980s—the real problem is the inflationary pressures that arise, partly because of the wealth effect of housing and partly because of short-term interest rates, in the housing market and their effect on the whole economy. Those are the matters that we will examine.
	I said in my statement that there was a realistic prospect of making significant progress during the next year. When we introduce proposals in October, we will deal with the inflationary problems that arise—and have arisen under all Governments—in the housing market. I would correct the right hon. and learned Gentleman: I talked about a national framework in pay bargaining. As London weighting and other issues relating to London and the south-east have shown recently, there must be a degree of flexibility in view of the different inflationary pressures, particularly from housing, in different parts of the country. I believe that there is currently a willingness to examine those issues, particularly when we have a framework for fairness in the economy built around the tax credits. We can establish common ground and make significant progress over the next year.

John Hume: Does the Chancellor agree that the logic of a single market is a single currency? What is the meaning of a single market without a single currency? Let us imagine the largest single market in the world competing with us—the United States' single market—and what would happen if one of the states had a different currency. The logic of a single currency for a single market is powerful. Does the Chancellor agree that, since entering the euro, Germany's trade within Europe has increased by 18 per cent., whereas this country's has decreased by 6 per cent.?
	Northern Ireland is the one region in the United Kingdom that has a border relationship with the eurozone, and people who live there know the difference that it is making to trade on our side of the border. About 88,000 employees in Northern Ireland are dependent on membership of the European Union, and 155,000 workers in Wales are dependent on it. I am quoting an in-depth study carried out by independent people. All the arguments show that we must join the euro as soon as possible for the benefit of all sections of our people.

Gordon Brown: I am glad to see my hon. Friend back in the House; I hope that his health is recovering. It is always a privilege to listen to him. He raises an important question about Northern Ireland's cross-border issues, which arise because the Republic of Ireland is in the eurozone. We have discussed those issues and tried to deal with the some of the problems, as well as the opportunities, that arise from that. He is right also to draw attention to the jobs that are dependent on our membership of the European Union; one of the failings of the Conservative party is not to recognise that 3 million jobs depend on the trade—imports and exports—that we have with the European Union.
	On the individual issues that my hon. Friend raises, we learn from the experience of the United States as both a single market and a single currency. The US has much mobility between the states—more so than in the European Union—but the same issues of flexibility arise, and we will have to deal with them.
	I agree with my hon. Friend about the importance of the single market and the benefits and principle of the single currency. The assessment that we have done shows that there are risks as well as benefits, and it is the responsibility of Government to continue to consider how we can solve the structural and cyclical problems. We will report back to the House in the Budget next year.

Michael Spicer: Last week, the Prime Minister told me that he did not know what the right rate of exchange was for entry to the euro, because he did not know what the circumstances would be. Since entry into the euro would be for ever, the circumstances surely do not matter. The Chancellor said today that he knows what the wrong rate is: what is the right rate?

Gordon Brown: The hon. Gentleman can see the studies that we have produced today. One of them is a study by Professor Wren-Lewis, in which he gave his view of what the equilibrium exchange rate is at this point in time. It is the Government's view, as I said in my statement—to which I refer the hon. Gentleman—that it is right to consider the issue just before the point of transition. Governments outside a fixed exchange rate system have never predicted or announced the exchange rates that they favour. The issue will be dealt with just before the point of transition and it would be wholly irresponsible to announce an exchange rate today. Indeed, the hon. Gentleman would not expect me to do so, although I sometimes wonder why he asks all these questions about the detail of joining the single currency, given that he has made it clear that he is against it in principle.

Denzil Davies: As a former Treasury Minister in a Labour Government who, after a rigorous analysis, decided that it was not in the national economic interest to join the ERM, may I congratulate my right hon. Friend on his rigorous assessment of the five tests and the sensible conclusion that he has reached? However, he will remember that in addition to the five tests there was also a question about whether the euro was a successful currency. Given the problems of most of the euro area since the Maastricht treaty was signed, is it his view that the euro is a successful currency?

Gordon Brown: The euro has been a successful currency. It was introduced successfully when everybody said that it would not work. They said that it would not happen in 1999 and they said that it would not, technically, work, and it did. They then said that the euro was too weak against the dollar, but that position has reversed in the past few months. We now have a far stronger euro against a weaker dollar. The question for us, however, is not the value of the currency at a particular point in time, but whether we have the convergence and flexibility necessary to gain all the benefits of trade and investment that would come from being part of the single currency area. I agree with my right hon. Friend that the rigour of the assessment is a sign of whether we take the issues seriously. I am disappointed that the Conservative party seems to have no interest in taking seriously the rigorous assessment that we have made.

Alex Salmond: Do not the 18 documents, 1,700 pages and tens of thousands of words amount to the longest "don't know" in political history? May I caution the Chancellor against the mental gymnastics he was performing in his statement? I have seen the House cheer him and I have seen it howl at him, but I have never seen it laugh at him, as it did for parts of his statement this afternoon.
	As far as the lack of analysis of the benefits to the economy of Scotland, Wales, the English regions and Northern Ireland is concerned, with the clear pointers to the benefits of output and employment through joining the euro, is there not a fair case for saying that the economies of those areas of the country are being sacrificed on the altar of problems in the south-east England property market?
	Finally, will the Chancellor tell us why he has suddenly made reducing pay for nurses, firefighters and policemen in Scotland, Wales and the English regions a condition of entering the euro? Does he really think that that will mobilise support for the single currency, or has he not bothered to tell the Prime Minister?

Gordon Brown: I thought that the Scottish National party spent all its time arguing for special Scottish rates and not for national and UK rates for wages. The idea that the hon. Gentleman now supports British rates and that there should be no separate Scottish rates seems to be a reverse for the Scottish National party from its previous position. The hon. Gentleman has spent most of his career arguing for a Scottish pound and for breaking away from the British pound, yet now he seems to be arguing that he wants the euro introduced and he has forgotten his policy for a Scottish pound. The Scottish National party has adopted a remarkable set of contradictory positions.
	On labour market flexibility, there is a national framework of fairness that the hon. Gentleman and other Members should support. Not only is the minimum wage agreed at a United Kingdom level, irrespective of the costs of living in different parts of the United Kingdom, but the tax credit system means that people who move between jobs, especially those in low-paid jobs, have additional funds whether they are single, part of a couple, or part of a family. The hon. Gentleman should support that framework of fairness for the whole of the United Kingdom.

Stephen Byers: As someone who has discussed the issue with the Chancellor on several occasions over recent years, I applaud the positive tone that he struck this afternoon. Does he accept that although it is clearly right to delay a referendum until it is in the national economic interest to join a single currency, that does not prevent the Government from consistently setting out the benefits of joining the single currency in terms of more jobs, increased trade and higher investment? Given that that is the case, will the Government begin to go out and campaign, and convince the British people of the benefits of joining the single currency? Will they move away from the present position of prepare and decide to a more positive one of campaign and convince, and will the Chancellor, alongside the Prime Minister, lead that campaign?

Gordon Brown: When my right hon. Friend was Secretary of State for Trade and Industry, as well as when he was Chief Secretary to the Treasury, he was active in promoting the case both for Britain in Europe and for a single currency. He agrees with me that the economic conditions must be right—that has always been his position—and that the five tests must be observed. He would agree with me that the rigour that we have brought to the analysis of the five tests is not only important but necessary if we are to get the right decision.
	I agree that it must be shown to the British people that there are benefits to joining in terms of trade, investment, the importance to the financial services and, as a result, jobs. I also agree that, in the campaigns that he mentioned, we should tell the British people that the benefits are real and available to them, and that we have to solve the problems of structural convergence and flexibility to make the benefits possible. We will consider all those difficult issues over the course of the next year and report back to the House.

David Ruffley: In the interests of clearing up uncertainty in the markets, will the Chancellor tell us in which month next year he will re-run his assessment of the five economic tests?

Gordon Brown: If the hon. Gentleman had followed my statement, he would know that we will report back and review the situation in the Budget. If the review shows that there is progress, we will decide whether to have a further Treasury assessment of the five tests. That will be contingent on the announcements that I make in the Budget next year.

Angela Eagle: In the evidence that the Treasury Select Committee took on the issue, we came across a significant worry, particularly among trade unions, that the stability and growth pact would put at risk the historic and very welcome investment that we are currently experiencing in our public sector. Will the Chancellor reassure them on that point?

Gordon Brown: The Government's position throughout has been that we would like to see a stability and growth pact that takes account of the three issues, and I believe that the previous Government took the same view. We have to take account of the level of debt. Countries with low levels of debt, such as ours, ought to be able to borrow more, particularly in difficult circumstances or in making public investment. Investment should be taken into account, and it should be realised that there is a distinction between investment for the future and current consumption. The economic cycle should be taken into account as well. In my view, other countries are gradually recognising that those issues are necessary for a successful stability and growth pact. There is considerable debate in the European Union, and I believe that, intellectually, we are winning that debate: the stability and growth pact must take into account those conditions. Of course, that is one of the issues on which I said I would report back to the House next year.

John Maples: If we were in the euro and found ourselves with a manifestly inappropriate interest rate, as do, for example, Germany and Ireland at the moment—in one case, it is too high, preventing economic recovery, and, in the other it is too low, failing to control inflation—what action would be available to the Chancellor to offset that? If he says, "Adjustments to fiscal policy", will he explain exactly how they affect monetary conditions, except in the medium to long term?

Gordon Brown: On convergence, the aim is to be able to live comfortably with the euro area interest rate—that is what sustainable convergence is about, and it is what we have looked at and are looking at in the five tests, and we have reported to the House on that—but we do not believe at this stage that that is the position. We believe, however, that reforms are important, first, in the flexibility of the labour market, so that there is sufficient flexibility to respond if business cycles start to diverge. We believe that, as a back-stop, the monetary policy regime that we introduced, which is based on the open letter system, should be introduced for fiscal policy, so that we have a modern form of fiscal policy that can back up the stability and growth pact in the monetary union. At the end of the day, four flexibilities are available to the Government: exchange rates, interest rates, fiscal policy and flexibility in wages and prices markets. We are looking to greater flexibility in wages and prices and to greater flexibility in fiscal policy.

David Hamilton: Does the Chancellor understand that, when he talks about breaking national pay bargaining, he is also talking about breaking national wages and conditions for the lowest-paid people in this country? I for one would oppose such a move. Does he understand that national pay bargaining is there for the weakest in our country and, indeed, that it is protected? The danger of moving down such a road would be that the minimum wage would become the maximum wage in many areas, especially in deprived areas?

Gordon Brown: I must correct my hon. Friend: he has been misled by Opposition Members. In my statement, I referred to the maintenance of the national bargaining framework, not to its abolition, but I said that, within the national bargaining framework, we now have to recognise, for example, conditions in London and the south-east, where, because of high inflation or high house prices, the cost of living for workers must be recognised in the wage bargaining formulae that are agreed. That has happened in many cases for professional workers, but not for low-paid workers, and it is very difficult for low-paid workers in some parts of London and the south-east to afford the housing that they need. I believe that recognising such problems is a progressive cause that he and other hon. Friends should support.
	It is true to say that the minimum wage itself is not the only component of the national framework for fairness that I am talking about. The people who benefit most from our national framework for fairness are, for example, single parents who are on relatively low hourly rates, but whose incomes are boosted very considerably by the operation of the tax credit system. The working families tax credit, which went to 1.3 million people, was a framework for fairness that allowed single parents and others returning to work, part-time or full-time, virtually to double the amount of earnings that they would have had under the national minimum wage.
	In April, thanks to the decisions of my right hon. Friend the Secretary of State for Work and Pensions, single people and couples are now also able to benefit from tax credits. So people who move between jobs or between regions can rely on there being in Britain—one of the few countries where this happens—a national framework for fairness, where the tax credits system ensures that the tax system will pay them money, rather than take money from them, if their wages are below a certain level.
	I hope that my hon. Friend will agree that the national framework for pay bargaining is in place, that there is a need to accept that local and regional differences have to be recognised and that the national framework for fairness guarantees that, wherever people are—in the north-east, Yorkshire, Scotland, Wales or Northern Ireland—they are treated equally in the provision of tax credits, which is a fair way to tackle poverty in our country and to remunerate properly people who otherwise, under previous Governments, would have been pushed into poverty.

David Trimble: I welcome the Chancellor's reference to seeking reform of the European Central Bank. I would appreciate it if he could give us a little more detail about what reforms he is seeking and what are the prospects for success. I welcome that because it points to where the attention should have been: not so much on the UK economy, which is performing well, but on the euroland economy, which is not. Many of the problems in euroland stem from the ECB and the stability and growth pact, and from the way in which the European Union operates. Is not that where change is needed? Until that change occurs, it does not matter so much what is done in terms of the adjustments that the Chancellor has mentioned today.
	I also welcome the reference to globalisation and promoting or removing barriers to EU and US trade. Does not that point to the future? The institutions that we have at the moment in Europe were designed in the 1950s, and may have been appropriate for the Rhineland economies then, but are not appropriate for the 21st century. The future lies in economic globalisation, which is what we should pursue vigorously.

Gordon Brown: I am grateful to the right hon. Gentleman. First, he raised the issue of Europe's future. The European Union was the first trading block and is now one of many trading blocks. It is recognising, however, that the only way to succeed in the global economy is to have far more outward-looking trading relationships, particularly with America. Whereas American investment in Europe has been very high since 1945, a feature of many of the last 10 years was that European investment in American companies was higher than American investment in Europe. An interrelationship therefore exists between the two economies on which we should build, and the proposals we have made today would add to the strong relationships that should exist between the two continents.
	On the right hon. Gentleman's point about the European Central Bank, I believe that there is a possibility of reform. In the last few weeks, he may have seen proposals that, while not removing the old two-pillars approach to monetary policy, would lead to a greater emphasis on the inflation target, and suggesting that the inflation target should be 2 per cent. on the harmonised index of consumer prices target, or less. That is a change from the position of the European Central Bank at the beginning, and we look forward to further progress on these issues. That is one of the issues on which I hope to report back next year.

Patrick Hall: Most people will welcome my right hon. Friend's commitment to a balanced and fair public debate, which is long overdue on these matters. Does he therefore share my concern at the increasingly hysterical and scaremongering tone of many of those in the anti-euro camp? Does he accept that the longer that we delay the referendum, the more that hysteria will seek to fill the void, which makes it all the more important that the Government should promote that public debate, treating the British people with respect as adults who are capable of making clear and rational decisions in the interests of Britain?

Gordon Brown: I am grateful to my hon. Friend for his comments, as I am for his work in promoting the car industry and manufacturing in his constituency and right across his region. He is absolutely right that the public debate is necessary and should be informed by the documentation that is being published today, which is most comprehensive on British economic policy and covers a range of issues from exchange rates to fiscal policy and monetary policy. Therefore, a degree of information is now available to the public that has not been available in the past. Equally, he would agree about the importance of convincing the British people that the five tests that we have set must be met. I was looking earlier at a speech that he made in the House saying that we must be clear that the five tests are met, which the measures that I have proposed today would help us achieve.

Ian Taylor: The Chancellor's enthusiasm for the euro today was positively infectious, and I congratulate him on the change: no longer are the five tests mere obstacles but benchmarks against which he can make a judgment that we should join as soon as possible. Therefore, would he accept that to those Conservative Members who believe that it is in the national interest to join the euro his reforms are welcome and positive? What evaluation has he made of the costs of our not yet having made the decision? He may be delaying it for only a year, but those costs are tangible in terms of investment, uncertainty and often on the effect of influencing changes in the European Central Bank and the stability and growth pact, which will not await our joining.

Gordon Brown: As the hon. Gentleman knows, I have always been positive about the principle of the single currency, and I have said that the five tests that we set down are an important guarantee of stability. We have looked at what might have happened if we had joined in 1999. I repeat what I said to the Liberal Democrats a few minutes ago: we looked at both the costs of not joining and the benefits of joining, and we found that to have joined in 1999 at the interest and exchange rates that existed would not have been in the national economic interest and would have led to a recurrence of the stop-go problems that we had in the past.
	I hope that the hon. Gentleman will agree that, although it is right and necessary for this debate to take place in the country and we can join together in supporting the principle of the single currency, it is also important that we are absolutely sure that convergence and flexibility are at the right levels so that the five tests can be met.

Martin O'Neill: While I welcome my right hon. Friend's commitment to the achievement of the convergence and flexibility objectives, will he share with us how he proposes to secure changes in the growth and stability pact and the European Central Bank? The example that he gave about the change in the ECB is both fairly modest and one in which we cannot participate because we are not part of the eurozone. Is that not a major obstacle to our securing the changes in the ECB that he achieved with such style and élan in the Bank of England?

Gordon Brown: I am grateful to my hon. Friend. His work as Chairman of the Select Committee on Trade and Industry has led him to look at the issues in some detail, and I appreciate what he is saying. As for the European Central Bank, I would not underestimate the importance of what is being considered. From a monetary policy that has essentially been about the examination of monetary aggregates, we now have a far greater interest than ever before in inflation targeting, and it is a debate that will continue.
	As for the stability and growth pact, just as on the issue of tax harmonisation where we are now winning the intellectual argument that tax competition and not tax harmonisation is the way forward, I believe that we are winning the argument about debt, investment, the economic cycle and the stability and growth pact. People now see that some of the elements that we have been putting forward should be built into the pact. The lessons from British monetary and fiscal policy are lessons that we will continue to put forward, and I believe that there is a great deal of interest in Europe in the British experience.

Peter Tapsell: As the Chancellor is so fond of raising the bogey of the exchange rate mechanism, may I remind him that, in total contrast to him and to the Labour Front-Bench spokesmen of the day, I argued strongly against joining the exchange rate mechanism? After we had joined it, on the Floor of the House I urged the then Chancellor to leave the exchange rate mechanism well before Black Wednesday. In that context, may I ask the Chancellor whether he has seen the famously macabre French play, set in a lunatic asylum, in which some of the cast try to slash their throats in the first act and then spend the rest of the play discussing whether to mount a further suicide bid before the final curtain? Is it really necessary for him to ask the British people, even in principle, to slash their throats a second time?

Gordon Brown: I thought that the hon. Gentleman was describing events at a Conservative party conference.
	As far as the exchange rate mechanism is concerned, this has all become a bit much: a Conservative Government took Britain into the exchange rate mechanism. They took the country in at the wrong—[Interruption.] One or two Conservative Members want to disown the process. They took us in at the wrong rate and the wrong time, and their only defence is now to try to blame the Labour party for decisions of a Conservative Government. We will make the right decisions for Britain in the national economic interest, and I believe that our record over the past six years in achieving stability contrasts entirely with the record of a Conservative Government who gave us two recessions and boom and bust.

George Howarth: Does my right hon. Friend accept that although manufacturing businesses in my constituency and elsewhere, especially those that are heavily dependent on trade in Europe, will be disappointed by today's announcement at first glance, when they think about it, they will realise that he has taken a balanced approach? As he considers these matters further in the coming months, will he ponder on whether it might be sensible for future assessments to include the Bank of England Monetary Policy Committee fairly prominently?

Gordon Brown: My hon. Friend has been active in pursuing the case for manufacturing industry in the north-west for many years since coming to the House. I believe that industry will welcome the way in which we are going about this. Industry wants stability most of all. We have provided stability over six years and we are saying today that we will do nothing that would put stability at risk.

Bob Spink: Uncertainty.

Gordon Brown: If the hon. Gentleman wishes to compare the record of the Conservative Government with that of the Labour Government on stability or certainty, he will find that he has very little to say to the House.
	My hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth) asked about the Monetary Policy Committee. Of course we are in regular consultation with the Bank of England on various matters and several people from the Bank worked on the studies that we produced today.

David Heathcoat-Amory: Stripped of its rather desperate camouflage, the Chancellor's statement boiled down to saying that if Britain joined a low-growth and high-unemployment rigid monetary system, it would not be a very good idea. Will the Chancellor be a little clearer about the referendum on which all this will eventually depend? He re-announced that there will eventually be a referendum on the issue, so why is it the Government's simultaneous policy to rule out in advance a referendum on the constitution of Europe, whatever the constitutional implications might be? What is the logic or sense behind those two positions?

Gordon Brown: The first is that the euro is a specific proposal that would change fundamentally the operation of monetary policy in this country. All parties in the House agree that it is a matter for a referendum. Secondly, the Government are not convinced that the proposals that will arise from the European Convention will be as bad as the right hon. Gentleman thinks but believe that they will be in line with the British Government's policies and will not raise fundamental issues of sovereignty, as he suggests.

Ronnie Campbell: When the euro was launched in our partners, all those countries, especially Germany and France, and more so Ireland, experienced a steep rise of prices on their high streets. Why should the British people vote for something that will cost them more money?

Gordon Brown: The issues of transition that occur when a currency is replaced with another currency, which caused problems in some European Union countries, are something on which we would keep a very close eye, if we reached that point. We would continue to report to the House on such matters. My hon. Friend rightly raises that subject but it is not an issue for the moment but at the point of transition to a single currency.

David Curry: I sometimes wonder whether the Chancellor draws a distinction between the national economic interest and the national interest. As far as the national interest is concerned, there is a great deal of talk about the new Europe that enlargement will bring into existence and the United Kingdom's opportunity to play a leadership role in that wider Europe. Given that there will be a natural gravitational pull toward countries that have espoused the policies that are considered to be central to the European Union, is it not important that the Chancellor bears those facts in mind and gets on with his further assessment at the earliest sensible opportunity?

Gordon Brown: I agree with the right hon. Gentleman on one point: the changes to the European Union, especially the addition of 10 countries, mean that we will have a European Union that will look outwards rather than inwards. The idea of fortress Europe will become a thing of the past and the concept of a trade bloc that exists on its own and is obsessed by its internal rule will change partly because of enlargement and partly because we must meet the needs of competition in the global economy. However, I would not jump from that to saying that irrespective of achieving convergence and flexibility, we should jump into membership of the European single currency. It is necessary to ensure that we have convergence and flexibility that will enable us to live with euro interest rates permanently while advancing our goals of high and stable levels of employment and the proper funding of public services.
	When considering those matters, I hope that the right hon. Gentleman will agree with his colleague the right hon. and learned Member for Rushcliffe (Mr. Clarke), the former Chancellor, that the five tests have a great deal to say for them and that it is necessary to meet them to ensure that potential benefits for trade, investment and co-operation with other EU countries are fully realised.

Ian Davidson: May I congratulate the Chancellor on ensuring that the decision, which as I understand it is clear and unambiguous, that it is not in Britain's interests to join at the moment is based on economic grounds, not on dogma? Can he assure us that any future review will be taken on similar grounds? Can he tell me how I can expect to inform people in my constituency that in order to get ready to join the euro we need to see an increase in postcode pay—in differentials—according to where people live? Does he not believe that if we want to become truly European on labour matters, we need to accept the information and consultation directive as soon as possible?

Gordon Brown: I think that the rest of Europe is warming to the tax and benefit integration that we propose. It recognises that social cohesion depends on a proper system of remuneration for people who might otherwise be the lowest paid workers in a community. That is why the tax credit system is important. I disagree with the conclusions that my hon. Friend draws about flexibility in the labour market. If we are to achieve full employment in every region of the country, we have to determine what other barriers to employment opportunity exist in those regions. The Secretary of State for Work and Pensions is examining how the Employment Service can do far more. Many people are unemployed in my hon. Friend's city who could be brought back to work quickly.
	However, we have to get the right balance between the fairness on which we insist—and on which the Conservatives would not insist—and the flexibility that is necessary in a modern economy to get the benefit of all the opportunities available. I hope that on reflection my hon. Friend will agree that the best strategy to get full employment in his city and his country is to combine the tax credit system with the reform of the Employment Service, to ensure that the new deal works effectively for the long-term unemployed or youth unemployed, and to get the flexibility needed to ensure that we have policies that adjust to the circumstances faced in different regions.

Andrew Tyrie: This statement was drafted somewhere in a corridor between No. 10 and No. 11 and, frankly, it sounded like it. For the past six years, the Chancellor has told us that he is firmly in control of the decision. Indeed, he made that absolutely clear when he recently came before the Treasury Committee on which I serve. After the extraordinary events of the past few weeks, with the titanic struggle over the drafting of the statement between No. 10 and No. 11, can he assure the House that he is still in control of the decision?

Gordon Brown: The hon. Gentleman heard me speak at the Treasury Committee and he has heard me speak today. The policy that we are pursuing is the policy of the Government. It is the right policy. It would be better from his point of view, as someone who has supported many of the changes that I am bringing about, if he directed his attention to the policy rather than the personality issues.

Geoffrey Robinson: Is my right hon. Friend aware that there will continue to be widespread support on the Labour Benches for his continued adherence to the five tests and, indeed, for the economic reform agenda that he announced today? I am sure he can reaffirm that the adoption of the consumer price index in no way implies the shadowing of any decision that might be taken by the Central Bank and that he would not, as he made clear in his statement, allow decisions in Europe to affect the sustained public investment programme, which is so necessary not just for the reconstruction of our public services, but for avoiding deflation that might otherwise occur.

Gordon Brown: I am grateful to my hon. Friend for raising that and for his work on promoting our country's industries, especially in the west midlands.
	On the inflation target, we are moving to the internationally accepted definition of consumer prices. It is a far better definition with a greater quality of information provided to influence the announcements of price indices. I believe that if the rest of the G7, excluding Japan, operate to that system, it is better to have an internationally valid system of comparison if at all possible. That is why it is right in itself as well as something that brings about greater convergence with the European Union.
	On the ERM, let me repeat what I said about monetary policy: we do not propose to rejoin the exchange rate mechanism. As for public investment, my definition of sustainable convergence is that we can live permanently with the euro interest rate while maintaining our programmes for the funding of public services and for high and stable levels of growth and employment. I believe that that is the best way forward for our country.

Several hon. Members: rose—

Mr. Speaker: Order. The Clerk will now proceed to read the Orders of the Day.

Points of Order

George Foulkes: On a point of order, Mr. Speaker. I would appreciate your help with a situation that I believe is unprecedented since you and I entered the House 24 years ago. As you know, we have an Opposition day on Wednesday, two days from now, but the House has still not been informed of the subject for debate on that day. That means that it is entirely impossible for Back Benchers to seek your permission to speak in that debate or to prepare for it, and Ministers, and indeed shadow Ministers, do not know whether to be present on that day. That is outrageous. Just because the Opposition cannot get their act together, cannot decide on the subject, and appear to be in total disarray is no reason why the House should be disadvantaged. Would you, Mr. Speaker, as the protector of the interests of the House, particularly those of Back Benchers, take action to remedy this situation immediately?

Mr. Speaker: I think that this is something that I should keep well out of. It is nothing to do with the Chair.

Stephen Ladyman: Further to that point of order, Mr. Speaker. On the last few Opposition day debates the Opposition have received well and truly bloodied noses. Can you assure me that this is not an attempt on their part to ensure that Government Members cannot prepare for Opposition day debates in the future?

Mr. Speaker: I have already ruled on that.

Barry Gardiner: rose—

Mr. Speaker: Is it different point of order?

Barry Gardiner: Further to that point of order, Mr. Speaker.

Mr. Speaker: Order. I have made it clear that that is not a point of order. Orders of the Day

Courts Bill [Lords]

Order for Second Reading read.

Yvette Cooper: I beg to move, That the Bill be now read a Second time.
	This is the Second Reading of the Courts Bill, which has already been well debated and discussed in another place. It forms an important part of a much wider, long-term programme to improve and modernise the criminal justice system, as set out in the White Paper "Justice for All". But more than that, the Bill aims to improve the entire justice system. It supports improvements in the civil and family courts as well as having particular measures to improve areas of the criminal courts where specific issues need to be addressed.
	Given the other business of the day, it is perhaps unsurprising that attendance in the Chamber is thinning out. I applaud the hon. Member for Stone (Mr. Cash) for his restraint in awaiting the debate. I recognise that it will have been difficult for him to resist the temptation to join in the debate on Europe and matters euro, but I welcome his presence for discussions on the Courts Bill.

William Cash: I cannot resist the temptation to reply to that. I simply say that I think that I have said a lot of it before.

Yvette Cooper: That is almost certainly true. I do not think that any of us will be in any doubt about his views on that issue.
	Nevertheless, the House overlooks the smooth running of the courts at its peril. Ultimately, the courts are a fundamental pillar of our democracy. They enable the delivery of justice and they underpin the rule of law. The running of the courts matters too because, ultimately, those members of the public who pass through the courts are those whose lives are troubled in some way or other. Be they distressed victims of crime, witnesses doing their civic duty, defendants at risk of losing their liberty, families battling over the custody of their children, claimants unable to resolve their dispute in any other way, those who end up in court need to be sure that justice will be done.
	Such people depend on courts to deliver fair and effective justice, and they depend on courts that are free from unnecessary and avoidable delay, that are in touch with the communities that they serve and more responsive to the needs of their users. The Bill's purpose is to establish a modern, efficient court system, one fit for the 21st century.

David Heath: The Bill sets out a key purpose of effectiveness and efficiency. It does not talk about accessibility. Is there a core necessity for courts to be accessible to the people who use them, without financial or geographical barriers? That is a question that many of us need to have answered during today's debate.

Yvette Cooper: In fact, an amendment to clause 30 concerning accessibility was tabled in the House of Lords. If the hon. Gentleman will allow me, I shall come to that later.

Andrew MacKinlay: I am not rushing to my hon. Friend's rescue, because she is well able to defend the measure herself, and will do so with great enthusiasm. On accessibility, however, I was convinced of the correctness of doing away with the magistrates courts committees—which is in clause 6—partly by my painful experience in Thurrock, where people who were accountable to no one in my community decided to remove the local court to Basildon. I want to place on record my people's gratitude to the Minister, who intervened on our behalf and today confirmed that Thurrock's magistrates courts will endure. We appreciate that very much. It is a question of accessibility. The guys and women who run the magistrates courts committee—

Mr. Deputy Speaker: Order. The hon. Gentleman has made his point.

Yvette Cooper: My hon. Friend is right. As a result of the appeal to Ministers, we overturned the decision of the Essex magistrates courts committee to close Grays magistrates court. It is important for hon. Members to recognise that although decisions always need to be taken about the court estate, including its modernisation—as was the case under previous Administrations—it is important that there should be a local voice in those decisions. My hon. Friend is not the only Member to have raised concerns with me about the system of magistrates courts committees, where decisions are taken entirely by magistrates, not by those who speak for the local community involved. That is one of the issues that we address in the Bill.

Julian Brazier: I am most grateful to the Minister for giving way again so early on. On that point, surely the existing system ensures that the administration of justice remains local, whereas the new proposals in the Bill, which effectively bring magistrates into the same structure as the Crown and civil courts, remove the locality of justice, to all intents and purposes greatly increasing the centralised power over that justice from the centre.

Yvette Cooper: That is simply not true. I shall cover the matter in a bit more detail later, but, to give an example, a statement issued by the Magistrates Association's criminal justice system committee on 6 May says:
	"The proposed Unified Administration is not a threat to local justice".
	We had a series of discussions with stakeholders as the Bill passed through the Lords to ensure that we set out a new organisation with a very decentralised structure. That is precisely the reason for setting up courts boards. Hon. Members should bear in mind that the hon. Member for Canterbury (Mr. Brazier) and many of his hon. Friends have complained that some of the decisions that are taken under the current system do not reflect the wishes of the local community. They cannot have it both ways.
	I want to put on record my thanks to the Select Committee on the Lord Chancellor's Department for its report on the Bill, which is published today. This is the first time that the Department has had a Select Committee to scrutinise our legislation, and it is an extremely helpful and welcome development. I shall try to address some of the points that it raised today, although we will obviously need to consider them. I am sure that we will have further discussions in Committee.
	Let me begin with the measures to introduce a unified administration for the courts, which I believe to be the most important and significant in the Bill. Sir Robin Auld recommended in his independent "Review of the Criminal Courts of England and Wales" that the administration of all courts below the House of Lords—the civil, family and criminal courts—should be integrated into a new single organisation. The unification of the management of the courts has widespread support from the judiciary, the Bar, the Law Society, the Justices' Clerks Society and the Magistrates Association, among others. It will end the division between the 42 magistrates courts committees and the Court Service and address the duplication and inefficiency involved in having 43 separate organisations running the courts. Sir Robin described the current position as "unnecessary, inefficient and wasteful".

Alan Beith: The Parliamentary Secretary kindly referred to the Select Committee. She described the Auld process, which involved widespread consultation during the inquiry and subsequently. However, when the Select Committee discussed the way in which the Lord Chancellor might exercise his powers under the Bill, we did not know that his replacement with a justice Minister in the Commons was under consideration. That has not been subject to the same consultation. Apart from all the other issues and the merits of such an action, the sort of consultation with the judiciary that the Parliamentary Secretary described appears not to have been undertaken.

Yvette Cooper: The right hon. Gentleman is interested in reading the papers and in the gossip and rumours that circulate. Clearly, such matters are for the Prime Minister, not me.
	The proposals will allow a more flexible use of resources and accommodation, thus encouraging parts of the system to work together more effectively to respond to local needs. A unified court estate would, for example, allow the heavy work load of one courthouse to be shared with another, underused courthouse, thereby perhaps saving one from closure while reducing delays at the other. It would also ensure that decisions about the location of magistrates courts were taken with the location of Crown courts, the Crown Prosecution Service and the police in mind. It would allow more flexible operation, especially in areas on the boundaries between existing magistrates courts committees.
	Unification in a single organisation will allow us to set a proper framework of national standards and to tackle poor performance in the courts. The latter is currently difficult in magistrates courts. For example, there are wide and unacceptable variations in fine enforcement between the independent magistrates courts committees, ranging from more than 80 per cent. in some areas to less than 40 per cent. in others. Government, Parliament or the local community can do little about poor performance in some areas under the current system.

Vera Baird: Is not the problem exacerbated by the fact that compensation to victims of crime is levied under the same system as fines, but paid first? That means that, if instalments are not paid, many people bear the cost of the crimes of which they have been victims.

Yvette Cooper: My hon. and learned Friend is right that failure to enforce fines and compensation orders can have a significant impact on the victims of crime and on wider society because the credibility of the courts depends on enforcing decisions. We are considering methods of separating the ways in which the data are gathered. I shall happily discuss those issues further with my hon. and learned Friend, if she is interested.
	The Bill also allows us to improve performance in the courts that the Court Service currently runs. The introduction of the courts boards will support more substantial decentralisation than exists in the Court Service. That will encourage local innovation and flexibility. It will also extend independent inspection, which currently applies only to magistrates courts, to other courts for the first time.
	The Bill will give local communities a much greater voice in running their courts and should improve the focus of the courts' management on fulfilling court users' needs. There is currently no role for local people in decisions about their county court or their Crown court, and there is little role for them in magistrates courts. Magistrates courts committees consist predominantly of magistrates, and their make-up does not even reflect local magistrates, let alone the community as a whole. For example, half the population and 49 per cent. of magistrates are women, yet they comprise only 25 per cent. of magistrates courts committee members. It is right for the new courts boards to reflect the community more broadly.

Graham Allen: Does the Bill make any effort to explain the work of magistrates courts to the ordinary, law-abiding person, perhaps through an annual report to every elector? If so, could we also consider giving courts names that reflect their functions? "County court" and "Crown court" do not mean anything to most ordinary people. Could not we use names such as "regional court" and "local court" and thus let the public into the secret instead of confining the information to lawyers?

Yvette Cooper: The Bill includes some changes of name to make certain things more comprehensible. For example, instead of petty sessions areas, we shall have local justice areas, which is far more transparent to those of us who might have been slightly baffled the first time we heard of a petty sessions area. The Bill also modernises certain titles in the judiciary. It does not set out some of the proposals that my hon. Friend has made. I know that he has raised these issues before, and I shall be happy to consider them further, although I think it unlikely that such measures would be included in the legislation. However, we certainly need to look further at the way in which each of the courts boards relates to the local community that it needs to reflect, and to ensure that the courts as a whole respond to the needs of the community and communicate with it. Some of the measures relating to magistrates' recruitment that are being considered might be an area in which some of the issues raised by my hon. Friend could be picked up.

Graham Allen: I thank my hon. Friend for her generosity in giving way a second time. Individual taxpayers probably pay several thousand pounds each to maintain the criminal justice system. Would my hon. Friend be open to either letters or amendments that would make it clear that those people were entitled to receive a report on something that they were paying for and that was being done in their name?

Yvette Cooper: I would certainly consider any letter that my hon. Friend chooses to send, or any further discussions on this issue that he wants to have.
	The Bill establishes a new Executive agency, different from both the Court Service and the magistrates courts committees, to be headed by a chief executive; local areas will be managed by chief officers. The chief officers will work in co-operation and partnership with the local courts boards established by clause 4. The establishment of the local courts boards within an Executive agency is an unusual approach. It will provide an important way of balancing the need for a national framework and standards and the need to prevent duplication with the need for local, decentralised decision making and accountability. The Select Committee's report asked for clarification of the role of the boards, and we have already placed a statement of the principles that will form the basis of the agency's framework document in the Libraries of both Houses. That sets out some of the details of the partnership between the agency and the courts boards and how we expect that partnership to work.
	Schedule 1 provides further details of the constitution and procedure of the courts boards. We are also still engaged in detailed discussions with many of those working in the magistrates courts service and the Court Service, as well as court users, to try to get right the exact nature of the work that the courts boards will do. I can tell my hon. Friend that I will set out an outline of some of the measures involved.

Gwyneth Dunwoody: rose—

John Horam: rose—

Yvette Cooper: I will give way to my hon. Friend first.

Gwyneth Dunwoody: May I ask my hon. Friend why it is necessary to set up an entire stand-alone agency? The history of agencies in this country is that not only are they very large but they grow consistently and are rarely tremendously responsible. Indeed, their whole structure is not usually responsible to the House of Commons.

Yvette Cooper: We already have an agency that runs the Crown courts, the county courts and the higher courts. In addition, we have 42 separate organisations that run the magistrates courts across the country. The Auld review concluded that that fragmentation into so many different organisations created all kinds of duplication and difficulty. Clearly, the new agency will be accountable to the House, via Ministers. Indeed, I think that there will be greater accountability to the House than under the current arrangements, under which, as hon. Members have said, when magistrates courts committees take decisions that the local community does not like or when they perform unacceptably, there is very little that the House can do to hold them to account. That is why it is right to bring the magistrates courts committees into a new agency that will incorporate both the Court Service and the separate magistrates courts committees. Equally, we need the local courts boards to have a voice in the local community and to allow the community to hold them to account for the local decisions that they make.

John Horam: I am grateful to the Minister for giving way, especially as I could not be present for the beginning of her speech.
	Perhaps the Minister's new arrangements would help us in Bromley. We have a brand new magistrates court which is half empty most of the time, while across the road the Crown court is packed out. Ours is a practical problem. Would the Minister's proposals solve it?

Yvette Cooper: I do not know the details, but that sounds like exactly the sort of problem that a new single agency ought to be able to solve. It is crazy that one court can be bursting at the seams while another nearby is half empty. In other circumstances there might be two underused courthouses. Neither the county court nor the magistrates court might be viable on its own, but the sharing of accommodation might allow both courts to be retained in the community.Such arrangements have already been made informally, for instance in Bolton and Salford. We have recently upheld several appeals against the closure of magistrates courts, one of the grounds being that the MCCs had not fully explored other possible options with the Court Service, and had not thought enough about the implications for the various courts. What the hon. Gentleman suggests would allow better use of resources.

Stephen Hesford: My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) mentioned answerability to the House. Under clause 1(4), the Lord Chancellor will have to lay before the House an annual report about the work of the new agency.

Yvette Cooper: That is true, and I think it will make the work of the courts and the new agency more transparent than it would otherwise be.
	The courts boards will consist of magistrates, judges, court users and representatives of the local community. We intend them to have a vital and continuing role in the strategic management of courts in their areas. They will be involved in the development of business plans at the start of the year, and will receive regular performance reports so that they can propose remedial action where necessary. The plans will set out how resources will be used to deliver services locally, and will include any proposals to open or close courthouses. We expect the boards to have a say in decisions about the court estate, including decisions about closures. That is, I think, a more involved role than the role envisaged by the Select Committee.

Douglas Hogg: Can the Minister confirm that it is not an executive role, and that the most that a board can do is express its views?

Yvette Cooper: The boards will not have executive powers. Some have argued that they should have such powers in their own right, but that would mean establishing separate statutory bodies to run the courts. We would have a version of the current framework for the MCCs, covering all the courts rather than just the magistrates courts. That would not allow us to address the problems identified by Sir Robin Auld, or the unacceptable variations in performance, without complex legislation that would probably cause further problems in terms of inflexibility. I think it would also be strongly opposed by those currently involved in work on the civil and family side and in the Crown courts.
	The courts boards will provide statutory backing for the non-executive role that will be played by their members, in partnership with the executives. We expect them to work very closely on proposals with local managers. The Bill specifically requires them to look at such matters as the business plan.

Graham Allen: I thank the Minister for her generosity in giving way again. She will have heard the remarks of our noble Friend Lord Falconer, the Minister of State, Home Office, in the other place, who said that we must place victims at the centre of the criminal justice system. Will victims' organisations have a place on the board, or will that be left open? I am thinking particularly of an example in my own area, where the youth court has converted a crèche into a waiting room. The alleged offenders and the victims sit in more intimate proximity than I am to the Front Bench, which obviously leads to intimidation of many witnesses. A victims' organisation would be the first to pick up on such problems.

Yvette Cooper: My hon. Friend makes an important point. We have discussed that problem in detail during regional consultations across the country, including with court users. We have not specified at this stage exactly who the members of the courts boards will be, but the Bill allows for at least two representatives of the wider community and two people who have knowledge of the courts. We put that wording in so as to include representatives of victims' groups or those who work with witnesses. That representation is possible under the current framework, and it is one of the issues that we thought through in drafting the legislation, but it is not one on which we have taken a final decision.

Alan Beith: I want the Minister to consider what the magistrates said to us in the Select Committee on the Lord Chancellor's Department. The Magistrates Association said of the boards that
	"they are neither one thing nor the other; they are trying to be both consultative, representative and, partly, management. What we are seeking are proper management boards".
	However, other witnesses came to us horrified at the possibility that these boards would have anything other than an advisory role, because they involve members of the judiciary. It seems impossible to reconcile those positions, so the Government will have to come down one way or the other: either the boards can make executive decisions or they cannot.

Yvette Cooper: The right hon. Gentleman is right that there are disagreements about that. Different stakeholders take different views. Although there is broad support for the overall process of unification, as a result of the debates that took place in the House of Lords, there is growing consensus behind the arrangements that the Government have set out. The alternatives to that were either to establish a single Executive agency or to set up separate bodies that would each have boards that have executive powers. If the boards had executive powers, that would result in the creation of separate organisations and would replicate many of the problems with the existing magistrates courts committees. We were keen not to have a traditional Executive agency.
	I concede that we are doing something new: this is not the model of the traditional Executive agency on which many public services are run. We thought it important to have a voice for the local community, but not one that was set apart and detached from the courts—not a separate committee that had no direct close links with the management of the courts—rather one that would involve non-executive members working in close partnership with the local managers of the courts.
	There was some discussion about whether we could do that without putting such a provision in the Bill, instead including in the framework document the requirement that every local manager would need to work in partnership with a local committee or a local board. We thought it was important to give them statutory backing, permanence and a stronger voice. That is why the courts boards are being established.
	We will establish an Executive agency, and it will ultimately be accountable to Parliament, and the buck will stop with Ministers and with the Lord Chancellor. We need to ensure that the views of local courts boards are taken seriously throughout the organisation to ensure that there is local decentralised decision making and that the local community is properly involved in those decisions.
	Much of the work involving different stakeholders is about how to make the system work in practice. It already has growing support as people have become more involved in the nature of the arrangements that are being put together. For example, the Magistrates Association said in May that
	"the new courts boards, despite their non-executive status, do appear to have an effective role and the ability to make genuine decisions".
	Some argued that we should not have the courts boards or anything like that, and that we should just have a traditional centralised executive agency. Others argued that we should have local boards with executive powers on the model of magistrates courts committees. We rejected both those views, and are building a different organisation. It will take some work and considerable further development, but it is the right thing to do and the right balance to strike.
	Hon. Members have raised many issues about the structure. That was discussed in detail in the House of Lords. Interestingly, one of the other things that was raised in the debates in the other place was the concern of the Magistrates Association that even under the current system of magistrates courts committees, magistrates do not feel sufficiently consulted and involved in decisions. That is why, after representations from the Magistrates Association, we agreed in the other place to an amendment that provides statutory backing to consultation directly with the magistracy, not simply via courts boards and via the management structure of the organisation.
	The Government strongly support the lay magistracy. They are extremely grateful for the tireless contribution that magistrates make to the unique system of lay justice. Our 28,000 lay magistrates represent one of the greatest commitments to volunteering in Britain. Although the Court Service has what I think is regarded as a very good relationship with the judiciary, we felt it important to recognise that the magistracy, not being professionals and not being in the courts at the same time, needed further statutory reassurance that their views would be properly taken on board in the new organisation.

Graham Allen: On that point, as the numbers of the magistracy decline, the House loads more and more new legislation on to magistrates to judge upon. Does the Bill in any sense address the shortfall in magistrates and the composition of the magistracy in terms of age and gender?

Yvette Cooper: The gender profile of the magistracy reflects relatively closely the gender profile of the population: 49 per cent. of magistrates are women. A lot of work has been under way for some time to increase the number of people from different minority ethnic communities in the magistracy. We are looking at possible recruitment expansion for the magistracy. Interestingly, the measures in the Criminal Justice Bill to extend magistrates' sentencing powers are a huge vote of confidence in the magistracy.
	Most of the detail about how the new organisation will work is not in the Bill, nor should it be. It is not our function as legislators to design the detail of a new organisation. We have said from the start that the new organisation needs to be built by those who are most closely involved in all the different courts at the moment. That is why an immense number of consultations have taken place. A report on the discussion groups that have taken place throughout the country is available in the Libraries of both Houses for hon. Members who wish to look further into that.
	As I have said, different stakeholders have different views on some of the detail. We will not satisfy everyone but I think that we have made important progress and are building a new organisation that has the confidence of the judiciary, the Magistrates Association, the Justices' Clerks Society and other organisations, stakeholders and trade unions that are closely involved in the running of the courts.

Rob Marris: Schedule 2, which is about the abolition of magistrates courts committees, sets out that the Transfer of Undertakings (Protection of Employment) Regulations 1981 I will apply. Will the Parliamentary Secretary assure the House, and people who work in the Court Service, that although TUPE does not cover pensions—because the acquired rights directive does not—the pension rights of those staff will be preserved upon transfer?

Yvette Cooper: I certainly can assure my hon. Friend that we have had considerable discussions with the unions about the pension arrangements. I understand that the unions are currently happy with the arrangements and I am happy to have further discussions with them if further concerns are raised. Those discussions have covered the details of pensions arrangements, as well as the rest of the TUPE measures.
	The Bill contains other measures to improve the efficiency and effectiveness of the courts, particularly the criminal courts. Part 2 supports the closer integration of the jurisdiction of the magistrates courts and the Crown courts. It will remove unnecessary restrictions and geographical boundaries, allowing cases to be heard at the most convenient location and helping to speed up the delivery of justice. Magistrates will have national jurisdiction, allowing them to be reassigned quickly if they change address, to sit at a court near their place of work, or to provide for circumstances in which it is inappropriate for a local bench to hear a case.
	Clause 19 underpins a much greater role for the Judicial Studies Board in the training, appraisal and development of magistrates. Part 7 of the Bill introduces a new statutory criminal procedure rule committee, following the recommendation of Sir Robin Auld that a single authoritative body to make rules for the Court of Appeal, the Crown court and the magistrates courts should be created.
	At present, there is no single forum for discussing improvements in the criminal trial process, and rules tend to develop in a piecemeal fashion. The new committee will be given a modernising and streamlining agenda to try to achieve greater integration in and consistency across the criminal justice system, and this has been welcomed strongly by the Lord Chief Justice.
	Fine enforcement accounts for a major section of the Bill. Bluntly, fine enforcement by the independent magistrates courts committees is too low, and there are unacceptable variations in the level of enforcement across the country.

David Kidney: As a footnote to the issue of the administration of the new service, as two consultations on the reorganisation of magistrates courts are going on in Staffordshire—one about a unified administration and another about reducing six petty sessional divisions to three—may I ask whether there is any point in continuing with such consultations and plans, in the light of the law that is about to be introduced?

Yvette Cooper: I do not know the details of the consultations to which my hon. Friend refers, but there is probably a need to carry on with sensible changes, whether at local or regional level. We cannot freeze the entire work of the courts simply because of the process of unifying the administration. Clearly, where decisions are to be taken on where the unified administration is relevant, or when links with other courts are relevant, those matters need to be taken into account. There will be problems if those facilities operate in a vacuum. However, it would be a mistake for all of those consultations and debates to be held up as a result.
	Effective fine enforcement is essential for upholding the authority of the courts, sustaining confidence in the fine as a sanction and ensuring that victims and prosecutors receive their compensation or costs. Currently, the percentage of fines and other payments collected by the courts stands at below 60 per cent. In some areas the payment rate is over 80 per cent.; in others it is under 40 per cent. That simply does not provide the necessary assurance to sentencers and the public that the fines imposed will be paid in practice. The Bill already sets out a series of measures to improve fine enforcement, and we are considering going further.

Humfrey Malins: Could the variation in the recovery of fines be anything to do with the ability and willingness of the persons fined in the areas concerned to pay?

Yvette Cooper: A series of factors may affect the level of enforcement in particular areas. Some research suggests that income levels in particular areas have an impact on payment rates; in areas with lower incomes, there are also lower payment rates. Some of those concerned genuinely cannot pay the fines that have been imposed; some simply will not pay—but variations in income are not sufficient to explain the variations in the level of enforcement.
	Other factors also affect fine enforcement. In areas where payment points were closed, there was an impact on the level of fines collected—which was hardly surprising, really. In some areas, fine enforcement courts were not held for a period; that too had an impact on enforcement rates. Magistrates courts committees can carry out some administrative functions that have an impact on the level of fine enforcement.

William Cash: It is understood that the Government propose to table amendments to deal with aspects of fine enforcement. Will the Parliamentary Secretary assure me that those amendments will be ready for the Committee, and not just introduced on Report—and, furthermore, that they will deal with some of the questions raised in the recommendations of the Select Committee on the Lord Chancellor's Department?

Yvette Cooper: It is our intention to table amendments in time for the Committee, and I want to outline some of the areas on which we are considering amendments. Our proposals were widely welcomed as improvements to the fine enforcement system; they were described in the Select Committee report as "manna from heaven," and I hope that they will bring about improvements.
	The approach behind the Bill is as follows: once the court orders have been made, enforcement is primarily an administrative process. There should be every opportunity for the offender to co-operate and to pay the fine promptly, but much less opportunity for persistent offenders to play the system. Support must be available for those who need help to organise their payments or who are genuinely struggling to pay. People should not be able to evade the sentences of the courts. That means that we need alternatives and advice for those who genuinely cannot pay, stronger sanctions for those who will not pay, and a better system of administration to make that happen in practice.
	The unified administration will allow poor performance in some areas to be addressed in a way that it cannot be at present. The Bill also provides for the courts to get better information on defendants' means, so they can sentence more appropriately in the first place. Clause 36 allows us to appoint fines officers, who will have discretion to vary payment terms and will be able to impose sanctions on defaulters who refuse to co-operate, without the need for further court hearings.

Douglas Hogg: The Parliamentary Secretary may be coming to this, but the Bill provides for discounts of up to 50 per cent. Has any study been made of whether the discounts are likely to reduce substantially the flow of revenue from fines or, alternatively, to drive fine levels up?

Yvette Cooper: We do not know the answer to that yet, which is exactly why we have to pilot the measures. Some have argued that the discounts will provide an incentive and will increase the level of revenue; others have argued that they will reduce the income, as the only people who will receive a discount will be those who would have paid anyway. We need to measure this in practice, which is why we have said that the discounts, the increases and the sanctions will be piloted first. We plan to begin the pilots rapidly, to assess the impact of the measures on fine enforcement and on the level of income flowing in to the courts.

Humfrey Malins: The Parliamentary Secretary mentioned new sanctions in the Bill. Apart from the clamping of vehicles, how many new sanctions are there?

Yvette Cooper: The Bill gives fines officers the ability to take further action without referring the matter back to the courts. The things that court officers will be able to do that currently they cannot do include—as well as allowing the discounts and the increases—registering the fine in the registry of judgments to make it more difficult to get credit, authorising bailiffs to seize defaulters' goods, and clamping cars. Those decisions can be made by fines officers to improve the enforcement system. The schedule includes a right of appeal against decisions made by fines officers. As I said, those arrangements, too, will be piloted.
	In parallel with the legislative programme, we are developing a network of support and advice, to be piloted alongside the measures in schedule 3, for those who need help in organising their payments, or who are genuinely struggling with multiple debts. It is important that we be able to distinguish between those who will not pay and those who genuinely cannot pay. This provision addresses a particular concern that was expressed by the Select Committee. For example, we are considering having citizens advice bureaux in courts—a measure that has been tried in some areas—to make sure that those with financial difficulties also get support and advice.
	However, we believe that we need to go further. Since the Bill was drawn up last autumn, we have considered further how to make fine enforcement more effective, and we expect to introduce some amendments in Committee. First, we will consider further amendments in relation to increasing the use of deductions of earnings or benefits. Why should people be able to evade the sentence of courts, when courts could easily deduct payments from benefits or wages, for example? We are looking at ways of making that easier for the courts.
	Secondly, we need to do more to address the problem of those who genuinely cannot pay. Where an offender has very limited means, we propose to give the courts the power to convert a fine into unpaid work. During discussions throughout the country, this power was requested by individual magistrates for cases in which, when sentencing, they know that the person before them is unlikely to be able to pay the fine, but no sentencing alternative is available. The Home Office is already working with the voluntary sector on this power. It will be available for cases in which the fines officer subsequently establishes that the offender does not have the means to pay the fine, or at the point of sentencing if the court believes that that is the most appropriate option. This proposal, too, will be piloted.
	Finally, we are considering introducing amendments to create more flexibility in the administration of the scheme. In March, the Government commissioned an independent review of the enforcement strategies currently being operated in magistrates courts committees. Ministers have not yet received the report's final recommendations and conclusions, but the preliminary recommendations are that the system set out in the Bill is still too inflexible. First, it allows fines officers to renegotiate a repayment schedule with offenders only once, before the matter has to be returned to the courts. Secondly, the review argues that the Bill is too restrictive in insisting that all the fines officers' new functions need to be carried out by employees of the new agency.
	Under current arrangements, some existing fine enforcement functions take place outside the courts. For example, some MCCs contract with private companies, and others with the police. The review also suggests that there is considerable commercial expertise involved in debt collection. Under the Bill's current drafting, there is little flexibility to draw on outside and commercial expertise in the new fines enforcement functions. So after discussions across government, we will consider further amendments to increase flexibility, while still retaining the Bill's safeguards against contracting out judicial functions, and ensuring consultation. We will look at those measures further once we receive the final report, and we also hope to place its conclusions in the Library before the discussions in Committee.

David Kidney: May I make another suggestion about flexibility, concerning information that is before the court and the fines enforcement officers? My hon. Friend began this section of her speech by saying that courts would have more information. A financial statement is required from the person before the court, but what is the position on the exchange of information with others, such as the Department for Work and Pensions and the tax authorities? My understanding is that either there is no law on the exchange of that information, or it is not very well known.

Yvette Cooper: Changes were introduced relatively recently to allow better sharing of information with the DWP and the Inland Revenue. I am happy to provide my hon. Friend with further details to allay the concern that he raises.
	It is clear that we must ensure that we improve fine enforcement, based on a system that works, and on evidence of what works. That is why we have made it clear that we want to pilot new measures and to consider the practicalities. Either way, it is clear that the current system is not producing the right results, and that reforms in this area are needed.

David Kidney: Will my hon. Friend give way just one more time?

Yvette Cooper: I will—once more.

David Kidney: I am grateful. My hon. Friend said at the beginning of this part of her speech that she was talking not just about fines but about compensation as well. Is it likely that someone's compensation will be reduced because a discount is given to the offender for prompt payment, and will the compensation order be converted into community service, so that the injured party gets no compensation at all?

Yvette Cooper: No, that is not my understanding, but I will ensure that the correct answer to that question is available in good time.

David Heath: As the hon. Lady may know, we discussed this matter during consideration of the Criminal Justice Bill. There is an overwhelming case for having some form of compensation fund to ensure prompt payment to the victim of a compensation order, which can then be recouped by the system that she is describing. Is that not the crux of the reform that needs to be made in respect of compensation orders?

Yvette Cooper: I recognise that those arguments have been made over time. The purpose of compensation orders is to ensure that the perpetrator of the crime provides compensation to the victim. That was the original intention, and I know that the Home Office has been considering this issue further.
	In answer to the question asked by my hon. Friend the Member for Stafford (Mr. Kidney), my understanding is that, in terms of discounts and other related issues, this provision does not apply to compensation orders; it applies only to fines.
	On court security, the Bill also includes provisions in part 4 for a more effective security presence in court buildings. Courts should be safe environments for all who use them. In particular, victims and witnesses must be able to come to court confident that they will not face harassment or intimidation, and the proposals in clauses 51 to 57 define the role of court security officers. The provisions in clause 93 enable the criminal courts to award costs against those whose serious misconduct causes parties to the proceedings to incur or waste costs. The taxpayer should not have to pay the bill if a case collapses or is delayed because of the serious misconduct of somebody else. Under the Bill, the person or organisation that causes the delay, or even the collapse, of the proceedings should have to pay the wasted costs. This fills a gap in the criminal courts' powers over costs, and should act as a deterrent against action that might delay or prolong criminal proceedings, or cause them to be abandoned.

Graham Allen: Does this provision include defence solicitors, many of whom know all the tricks of the trade? As my hon. Friend knows, I raised this issue with her during the Department's two most recent oral question sessions. In order to prolong the intimidation of often elderly and vulnerable witnesses and to get their client off, adjournments are sought for spurious reasons. Will such compensation be levelled against those colleagues in the legal profession?

Yvette Cooper: As my hon. Friend will recall from some of our discussions of this issue, through separate work under the case preparation project, consideration is being given to the different responsibilities of all the players in the criminal justice system—including defence lawyers—the different existing incentives, and whether further incentives or penalties ought to be introduced to prevent unnecessary delays and adjournments. Of course, wasted costs orders can already be levelled against defence or prosecution solicitors under the current system. The case preparation project will consider how that provision could be taken forward in practice.

Alan Beith: Will the Minister confirm that among those who could be affected by that provision are newspapers that cause cases to collapse because they prejudice a fair trial through the material that they produce, or which induce trials that should never have been brought in the first place? However, given the balance of press freedom and the issues under discussion, surely she recognises that it is important that the House be able to see how the provision will work. We therefore need to see the regulations that will determine its scope.

Yvette Cooper: I think that there may have been some confusion over the matter, which was picked up in the Select Committee's report. It is not our intention to introduce regulations in this respect; it will be for the courts to decide what serious misconduct amounts to, according to the circumstances of individual cases. We will not bring forward guidance or regulations on that matter, but leave it to the courts to decide. The right hon. Gentleman is right in that a wide range of potential third parties are included—the media, as he said, but also jurors, or perhaps people entering the court to sabotage court proceedings. It is appropriate for the courts to decide what counts as serious misconduct in particular cases.

Clive Soley: rose—

Yvette Cooper: I will give way to my hon. Friend, who has not intervened before—but I have been speaking for some time, and I know that other hon. Members want to speak.

Clive Soley: I am slightly puzzled. I am particularly interested in this part of the Bill and I am strongly in favour of its provisions, particularly those dealing with newspapers and others who are responsible for the collapse of trials, or wrongful convictions. In many respects, I am happy to leave that for judges to decide. However, I am puzzled because clause 93(4) states:
	"Regulations made under this section may, in particular . . . specify types of misconduct in respect of which a third party costs order may not be made",
	and then provides further examples. It expressly refers to regulations, so I am puzzled about the implications, and I am glad that the Minister is better equipped to understand them than I am.

Yvette Cooper: My hon. Friend is right, and my officials have hastily provided me with a detailed note clarifying the position. There will be regulations, but not guidance. The confusion that arose is about the guidance that the Attorney-General said that he would issue about the way in which trials could be prejudiced. Guidance is separate, but my hon. Friend is right to say that regulations will be made in respect of those matters.
	I am aware of the issue of the timing of regulations, which was mentioned by the right hon. Member for Berwick-upon-Tweed (Mr. Beith). He made a good point about timing, but we have to consider some issues further and will return to the issue as part of our general response to the Select Committee's report.
	The Bill introduces a series of measures on the civil and family courts. For example, clause 77 creates a family procedure rule committee with the power to make rules of procedure for the magistrates courts, the county courts and the High Court when hearing family proceedings. That will help to promote clarity and consistency of approach across the various tiers of courts hearing family disputes.
	The provisions in clauses 98 and 99 will strengthen the civil courts' power in personal injury cases to award damages in the form of periodical payments rather than a lump sum. Regular periodical payments provide a more appropriate way of compensating claimants for future loss and care costs. They will help to ensure that seriously injured people receive the compensation to which they are entitled for as long as it is needed, giving greater security to claimants, who will be able to plan for the future without any anxieties about the award running out.

Rob Marris: I should declare that my constituency party receives money from Thompson's, a firm of solicitors that does a considerable amount of civil work. Can the Minister say whether the provisions will save or cost the insurance company money—save, because people who die shortly after receiving a huge lump sum currently keep it, or cost, when someone who lives for a long time receives many periodic payments? Has any assessment of cost to the industry been made?

Yvette Cooper: If my hon. Friend will allow me, I shall ask my fellow Parliamentary Secretary to respond to that in her summing-up speech.
	Part 6 contains provisions to improve the public's perception of the courts. For example, it changes the ways of naming people in the judiciary, allowing female judges of the Court of Appeal to be styled "Lady Justice" rather than "Lord Justice", and allowing the Lord Chancellor to modernise other judicial titles further. Coupled with the consultation on court dress currently being run by the Lord Chancellor's Department, those measures are part of improving the public impression of the justice system.
	The Bill will have a powerful effect on the delivery of modern, efficient and flexible courts. It will promote better management and administration, with potentially fewer delays, and a greater focus on the communities that the courts must serve. The Bill improves support for victims and witnesses, and provides a fairer means of compensating those who have suffered personal injury, while removing unnecessary complexity and outmoded traditions. Those measures will make a real and practical difference to the courts, while supporting our overarching aim of "Justice for All". I commend the Bill to the House.

William Cash: The Bill is important and has been given serious consideration in the other place. On Third Reading, there was a great deal of sensible and, in my view, merited mutual congratulation as between one side and the other. The noble Baroness Scotland of Asthal said:
	"It has been a great pleasure to work with such industry coming from all sides of the House. The Bill goes to another place in a better order. It speaks highly of this House that the work has been done with such good feeling and in comity."—[Official Report, House of Lords, 19 May 2003; Vol. 648, c. 548.]
	From my reading of the proceedings and from the amount of industry put into the work, it speaks well of the other place that the Bill has been improved so much. Irrespective of some of the more confrontational issues that sometimes divide one House from the other, it remains possible greatly to improve a Bill as a result of the efforts of both Houses.
	I particularly congratulate the noble Baroness Anelay of St Johns, who played an enormous part in the proceedings. She would be the first to recognise that a certain friend of hers—she will know what I mean, if nobody else does—played an important role in helping her as the Bill progressed. Others also deserve special mention: the noble Lord Hunt of Wirral, the noble Lord Renton and the noble Viscount Bledisloe. I hope that I have not left anyone out.

David Heath: Lord Goodhart.

William Cash: And the noble Lord Goodhart. Baroness Scotland herself referred to the noble Lord Goodhart as having played a major part in the proceedings. It would be invidious, as I have mentioned so many peers, not to mention the noble Lord Bassam of Brighton. Debating in either House depends on people being prepared to listen and to recognise a good point when it comes up. In fact, I would go further and point to the significant number of improvements that were made, some the result of consultation with various bodies—the Magistrates Association, the Central Council of Magistrates Courts Committees, the Justices' Clerks Society, the Association of Justices' Chief Executives, the trade unions and, of course, the Law Society. Many people have been diligently employed in trying to improve the Bill. I also congratulate the officials who have given such wise advice on the significant number of amendments that the Government have—surprisingly, in view of their attitude to amendments in other Bills—accepted.
	When votes took place, the margin was, in many cases, narrow. That applies to amendment No. 132, which goes to the heart of the important question of the amount of fees payable, and requires the Lord Chancellor to have regard to the need to facilitate access to justice. I shall deal with the matter in broader terms when we debate clause 1. The vote on that amendment—and I do not wish to cast aspersions on the noble Lords who voted against it, because such things happen when the Whip is operating—showed that the Contents were 37 and the Not Contents were 36. That is a margin of one. Given the importance of some of the amendments, I hope that the Government will not be tempted to change some of the great improvements that have been made. Everything that I say today is without prejudice, because I hope that the amendments will be retained—

Rob Marris: Subject to contract.

William Cash: Indeed. I also believe that further improvements will need to be made, and we shall carefully scrutinise the entire Bill.

David Heath: The hon. Gentleman mentioned the closeness of one vote on an amendment, but on the very amendment that the Minister prayed in aid earlier as an example of how the Government had listened, the vote was 90 to 89—a single vote. So we must hope that there is no backsliding in this House.

William Cash: We have taken careful note of the narrowness of some of the votes and, as the hon. Gentleman says, we hope that that will not lead to an attempt to reverse them. That would cause much unhappiness and lead to us perhaps changing our attitude to the Bill. After all, our attitude will depend on what the Government are prepared to accept, given the tremendous efforts made by all the parties concerned.
	The Minister mentioned the important question of access to justice, and that remains a critical question, together with people's financial ability to obtain justice. The two issues run together. I pay tribute to the original and sensible approach that has been adopted by the new Select Committee on the Lord Chancellor's Department, and I am glad to see that the Chairman of the Committee, the right hon. Member for Berwick-upon-Tweed (Mr. Beith), is in his place. In fact, several members of the Committee are present for the debate. It was an exercise not just in pre-legislative scrutiny but in current legislative scrutiny. Theoretically, Bills can be referred to Committee by motion of the House and subjected to a process of cross-examination by counsel. That would happen in unusual circumstances, but it has happened on a few—very few—occasions. The procedure adopted on this Bill is novel, but encouraging, because it provides a method for considering issues that are complicated and esoteric, but of enormous importance. It ensures that the issues are weighed in the balance, and I was glad that it was followed in this instance.
	The questions that the Select Committee raised in its interesting report—which will have to be judged against the Committee stage in this place—include the issue of accessibility and court closure. The Committee suggested that the general duty in clause 1 should be framed in such a way as to impose on the Lord Chancellor a duty to provide a system that is accessible as well as efficient and effective. I hope that the Government would regard that as sensible, as a matter of principle. Reference has already been made to the question of the local courts boards, and it is also proposed that the Lord Chancellor should be required to consult them about decisions on places, dates and times of magistrates court sittings. That is also a sensible idea. What is the precise role of the courts boards? The Minister explained the Government's thinking to some extent, but we will need to pursue the matter further in Committee.
	The Select Committee also questioned the extent to which the proposal to make justices' clerks civil servants might affect the effective performance of their functions, and it also explored how proposed powers for new fines officers might impact on those on very low incomes. I have been deeply concerned for some time about the question of enforcement of fines, and we will want to examine closely the way in which the new fines officers' powers will work.
	Last year, indeed, my hon. Friend the Member for Mid-Worcestershire (Mr. Luff) and I raised the issue of fines enforcement in magistrates courts. The then Parliamentary Secretary gave us a not very convincing answer. My question attempted to put the issue into a practical context. I said:
	"To give just one example, in London the latest figures show that the fines imposed in magistrates courts amount to £92 million but, astonishingly, the fines collected are no more than £41 million".—[Official Report, 15 January 2002; Vol. 378, c. 146.]
	I trust that the Government will address that issue in the consideration of the Bill, but we will have to wait for the Committee stage for details. Part of the problem is inability to pay, but it is also clear that there is some inefficiency in the system. I trust that that will be addressed.

Yvette Cooper: indicated assent.

William Cash: The Minister nods vigorously.
	The Select Committee also considered the need for a police presence to provide court security and the accountability of the proposed court security officers. An amendment was made in the Lords that required the Lord Chancellor to have regard to the need to facilitate access to justice when setting fees.

Douglas Hogg: On the question of fees, which are to be determined exclusively by the Lord Chancellor with the consent of the Treasury, after consultation with the judiciary and others, does my hon. Friend share my concern that there is no apparent duty to consult the users?

William Cash: I certainly do. I do not know whether my right hon. and learned Friend anticipates the possibility of serving in Committee on the Bill, but I suppose that that will be for others to decide—

Douglas Hogg: On previous occasions, I have volunteered and been turned down.

William Cash: I have no idea why that happened, and it is highly regrettable. My right hon. and learned Friend makes an important point and I trust that it will be pursued in Committee.

Gareth Thomas: What is the position of the hon. Gentleman's party on fees and the apparent need for civil justice to be financed by their inexorable increase? Are the Conservatives comfortable with the fact that the current system seems to be run on the full recovery principle?

William Cash: The shorter answer, which will no doubt be developed in the Standing Committee, is that I have been uneasy for some time about the manner in which justice is seen to be done. The Law Society has pointed out that we could reach a state, as happened recently, when the whole justice system could be severely affected, as the hon. Gentleman described, so we need to examine the matter with extreme care.

Gareth Thomas: I am grateful to the hon. Gentleman for that response. Does he agree, however, that it was the Conservatives who, in 1992, introduced the idea that litigants should finance the system and that that has meant a huge inflation in court fees, often at the cost of access to justice?

William Cash: The hon. Gentleman has not quite picked up the implication of my allusion to the fact that we need to look at those matters again. I have a certain amount of sympathy with him on the point, irrespective of where difficulty arose in the past. In other words, I am not in favour of privatising the judicial system. It is not difficult for a Conservative to utter those words because the system must be, above all else, a public concern. Improvements in the management system could be made, which I would applaud, but that is not to say that the system itself and questions about fine levels and enforcement have to be related to justice rather than to other considerations. My views and those of the hon. Gentleman may not be that far apart, but I should prefer to leave detailed examination of the matter to the Standing Committee.
	The Select Committee also supported the proposed power to impose costs on third parties in cases of serious misconduct. The Committee also called for the draft of the regulations defining the scope of those powers to be made available when the House considers that part of the Bill—a proposal that has some merit.
	I hope that I am not stealing the Select Committee Chairman's thunder by mentioning all those matters, but it is important that we take account of an important and newly distinguished Committee, which has gone to the trouble of examining the Bill. I sincerely trust that those matters will be carefully considered in the Standing Committee.
	My next point relates to family courts. The Law Society has made it clear to me that it welcomes the Bill. When the Auld review produced its vast, voluminous tomes, many people were uncertain about whether the measure was a good idea, as it appeared to introduce many radical changes. Not unnaturally, many conservative, and Conservative, people—including me—wondered whether it really would be the best thing since sliced bread. However, after seeing how the matter was dealt with in the other place, all the people who had previously written to me expressing deep anxiety appear to have taken a much more measured view.
	The Law Society shares that view but remains concerned about the fact that family courts remain fragmented. The society
	"would welcome the establishment one administration body for the magistrates' courts, county courts and High Court".
	We should give serious consideration to that point in the Standing Committee. I am sure that the Minister already knows about the matter, but as she did not mention it in her speech, it seemed sensible for me to do so.
	Furthermore, to return to the comments of the hon. Member for Clwyd, West (Gareth Thomas), we need to ensure a proper balance. No one would complain about efficiency, but it should not be at the expense of the most vulnerable people in the justice system. It is easy to talk about people convicted of speeding on the motorway in their fast Jaguars. They do not receive much sympathy, especially in cases of drink driving. As someone who once read the history of the common law, however, when I look back at the history of our courts I am deeply struck by the efforts that have been made over 600 years to ensure that the less well-off receive proper justice. We should always bear that principle in mind.
	Unification of the criminal courts is extremely important. However, although we need to make sensible use of resources, there are reservations about how the measure will work in practice, especially as regards venues. The needs of the parties must be taken into consideration. The place and manner in which court business is allocated must be carefully considered.
	I am extremely glad that the Government have made it clear that fines officers will not have the power to change the sentence of the court by increasing fines without the court's authority. That is an important principle and the Government made a sensible response.
	Some people who are fined have rather chaotic lifestyles—that seems a fair description—and are unable to pay their fines. It is important that the Bill makes it clear that, in considering cases of outstanding fines, fines officers should keep at the forefront of their mind whether people have the ability to pay, without prejudice to the fact that those who deserve a fine should pay it. I note the Minister's comments about discounts and so on. This point is really for the Standing Committee but it is important. A large proportion of people with fines to pay come from a particular background. In responding to their requirements, it is also important to ensure that, even while having regard to the ability to pay, justice is properly done. I do not advocate the idea that just because someone comes from a difficult background they should not pay a fine, although when we consider parenting orders and so on, we can be in difficult territory.

Douglas Hogg: I understand what my hon. Friend is saying, but it is for the court to determine the level of the fine. The court should take into account ability to pay when making the fine.

William Cash: Indeed. I should not have mentioned the case if my right hon. and learned Friend had not made that point, but a relation of mine—a young fellow—was fined so heavily for what was not a serious offence that he did not have the means to pay. He took the matter to the Crown court. The judge listened to him carefully and substantially reduced the fine. So the initial attempt to try over-impose on someone who had only limited means was rectified in that instance in the courts. I had better pass on from that point now, but I am grateful to my right hon. and learned Friend for his intervention.
	On a rather technical point, there is no right of appeal against the decisions made in respect of pre-trial binding rules—in other words, the magistrate's right to vary the order if the circumstances change significantly—in criminal cases, including in the youth courts, although such rights are important.
	We have touched on the broader issue of access to justice, and I have dealt with that sufficiently in principle, so I can let it rest for the moment. However, I feel strongly that access to the courts is a constitutional right, which should not be barred by excessive court fees in the Government's attempt to recover the cost of the civil justice system. For that reason, it is important that, in setting the fees, the Lord Chancellor should be required to consider access to justice. That point is reflected in the report by the Select Committee on the Lord Chancellor's Department.
	Without prejudice to anything done under any previous Government, some important points need to be taken into account in relation to amending judicial salaries—another contentious issue. I simply make the general observation that, as the Law Society has pointed out, most other English-speaking jurisdictions, including the United States and Australia, and many European jurisdictions, have rejected the notion that the civil courts system should pay for itself. It is accepted that individuals receive some benefit when they use the court system and that, accordingly, they should pay fees, but the public function of the courts must be recognised. Speaking as a solicitor myself, I certainly feel it necessary to say from the Dispatch Box that I recognise the importance of that statement.
	Continual increases in court fees discourage citizens from using the courts, which encourages further increases in fees. Failure to invest in the courts system leads to the courts providing a poor service, and the combination of expense and poor services will further drive citizens away. All hon. Members would agree that that would not be in the interests of justice or in those of the people whom we seek to represent.
	I should also like to refer to a number of points in relation to the Magistrates Association, which has diligently suggested amendments to those who sit in the other place. The association's original main concerns were the role and function of the courts administration council, now called courts boards; consultation with magistrates at local justice area level, which is very important; the size and number of local justice areas; and recruitment strategy for magistrates.

Rob Marris: This is perhaps a tangential point, but, like the hon. Gentleman, I am a solicitor and a member of the Law Society. Has the Magistrates Association considered clause 13? It seems surprising that the bar on people continuing as lay magistrates after the age of 70 will be statutorily continued under the Bill, given that—as he will know, given his great interest in matters European—under article 13 of the treaty of Amsterdam, we in this country will have to outlaw age discrimination by the end of 2006. Does he find that provision's inclusion surprising?

William Cash: I never cease to be amazed but am unsurprised by anything on such matters that comes from the European Union. I can only say that I have said repeatedly that I suspect that the white book and all the rules of procedure that are prescribed at the moment by our domestic courts will require revision. I said that during the proceedings on the Nice treaty. Under the proposed constitution—if it were to be adopted by way of an Act in this country, heaven forbid—the enhanced powers of the European Court of Justice would have a powerful impact on how such matters have to be interrelated, but that issue is probably best left to consideration in Committee.
	The other matters that the Magistrates Association had wanted to clear up were the grounds for removal of magistrates; the training of magistrates; and the whole question of fines officers, which we have touched on already. In fact, the association's deep concerns at the beginning have been largely dealt with, and it has told me unequivocally that amendments in the other place have fully met some of its concerns and greatly improved the situation in relation to others. However, as with the others who have made representations, the association is anxious that none of those gains should be lost and there are still points on which it would wish to press for further changes in the Bill.
	For example, the association found the original proposals in relation to the rule and function of courts boards totally unsatisfactory, and it still suggests that the new structure could be highly centralised. Again, that point will need to be considered. On striking the balance between the efficiency of the local administration with access to local justice and ensuring that the powers given to the Lord Chancellor and others do not result in over-centralisation, we find that the proposals are somewhat driven by cost considerations, because that is a Treasury function. We must not have something that looks as though it will achieve good local administration—very much a local concept—only to find that the imposition of Treasury requirements results in greater centralisation.
	The Government have indicated that they are keen that the courts boards should have a non-executive role and the Bill has been improved, but that is a somewhat contentious issue. The Magistrates Association certainly believes strongly that there should be full executive power. That issue is extremely important. Magistrates need to be able to ensure that they have full authority to carry out the job, and I suspect that it is valid to suggest that it will be necessary to strengthen the role of magistrates and courts boards. That is why I mentioned the issue that the Select Committee raised about the precise nature of the courts boards' role.
	The association also considers it a matter of great importance that the number of courts boards should not be lower than 42. I have to confess that I am not absolutely convinced about why 42 was the chosen number.

David Heath: It is the number of police authorities.

William Cash: I am grateful to the hon. Gentleman for giving me the answer. On the basis that the courts boards should be coterminous with the current police authorities, that suggestion makes a great deal of sense.
	On consultation, the Government new clause that lays a duty on the Lord Chancellor to consult lay justices on the performance of their duties, rather than on the administration of the courts, was extremely important, but it is even more important that such consultation should be complete. I say only this: the word "consultation" is not interpreted as I heard the Leader of the House mention with regard to the Intelligence and Security Committee the other day on the "Today" programme. I was certain that he said that it was necessary to obtain the Committee's consent as to whether the Prime Minister could expunge the record of the report of that Committee. The word "consultation" means no more than that people's comments will be listened to responsibly, but without the obligation to act on them. I issue this caveat: in this important area, in which lay justices' performance of duties are involved, something stronger than consultation may be needed, such as words to the effect that consultation should have regard to the performance of their duties. I do not intend to prejudge the Committee stage, but certain matters must be considered in principle on Second Reading, and that is one of them.
	With respect to the size and number of local justice areas, it is incredibly important that the local justice areas remain local. The great distances that are already travelled following court closures and amalgamations undoubtedly put a significant strain on the courts system and undermine local justice. I have had reason to mention this previously in the House. Many Members have had court closures in their constituencies, and they cause a great deal of justifiable concern, particularly when the court closure is followed by a lack of access to justice. Elderly people, whether witnesses, defendants or victims, cannot simply jump into cars at the drop of a hat. If somebody has to drive an unfair distance, or no bus service is available, a severe restriction is put on the manner in which people acquire not only local justice but real justice. We need to bear that in mind.
	Police are having to spend more time coming to court for criminal matters, and I am glad that clause 30, which was amended in another place on Report, and further amended on Third Reading, specifies that
	"the Lord Chancellor shall have regard to the need to ensure that court-houses are accessible to persons resident in each local justice area."
	That clause is very important. I re-emphasise that the amendment accepted by the Government must not be disturbed in proceedings in Committee, which would be a retrograde and unwarranted step.
	On the question of justices' clerks, the amendment to the new clause retained a specific link through assigning a clerk to specific local justice areas, and ensuring that the benches, through their chairmen, were consulted before any change of assignment. The question of whether all these matters will be retained in the Bill is one on which I look to the Minister to reply in the wind-up. My hon. Friend the Member for Surrey Heath (Mr. Hawkins), who will wind up for the Opposition, will no doubt keep a watchful eye on that.
	I have raised the question of the high sheriffs previously with the Parliamentary Secretary. My point was that the removal of high sheriffs from rolling high court enforcement will break the link between the high sheriff and the under-sheriff. That has certain consequences of grave concern to both, because in the past, the under-sheriff has offered the incoming high sheriff an indemnity against litigation that might be brought by aggrieved debtors. I asked whether the Lord Chancellor's Department would indemnify the high sheriffs in any outstanding period between Royal Assent and the point at which the statutory limitation became legally effective. Bearing it in mind that I only get one shot at Lord Chancellor's questions, we will have much more opportunity to pursue the matter in Committee. In a nutshell, the hon. Lady's response was that one of the reasons for the change was that it was felt that it was unfair for a volunteer to be under certain legal obligations and to carry such a responsibility. As for the time between Royal Assent and the continuation of the indemnity, she said that that would be looked at and consulted on. I assure her that we, too, will look at the matter again in Committee, and we will insist that it is dealt with properly.
	The question of compensation can be dealt with in Committee, other than to say that this matter arose in the 1970s with respect to the loss of emoluments. On the face of it, under-sheriffs face a loss of emoluments as a result of the Bill. A memorandum was prepared at that time, to which we will refer in Committee, which was dependent on what is known as the Crombie code. It dealt with how compensation could be paid and came into effect in the context of the Courts Act 1971. I simply put on notice that this is a matter that is as yet outstanding, and I do not think that it was dealt with in the other place. It is therefore a matter to which we will want to return in Committee.
	Having said all that, the content of the Bill is greatly improved, which is a measure of the good sense on both sides of the House in the other place, and of the industry that was put into it. I hope that we will reflect on that on Third Reading. The Bill can be improved, and has been improved, and I hope that in Committee it will continue to become better and better.

Stephen Hesford: It is rather strange to follow the hon. Member for Stone (Mr. Cash), who opened for the official Opposition. Perhaps you, too, Mr. Deputy Speaker, did not hear the word "welcome" fall from his lips in relation to this Bill. He is out of touch with members of the public not only on Europe but on why the Bill is before the House: namely, because it is on the Government's reform agenda. My right hon. Friend the Chancellor spoke earlier of the economic reform agenda, and previously we discussed the reform agenda for the health service, which Opposition Members opposed in respect of foundation hospitals. Today's debate has shown that Opposition Members do not understand why the Government have taken on reform of the courts service, which is not the usual agenda, it is often said, of the Labour party.
	The hon. Gentleman disclosed no policy on behalf of the Opposition. Indeed, he disclosed no principle underlying anything that he said, and hon. Members may have been taken aback by his opening remarks. When he went through what had happened in the other place, which considered the Bill extensively in eight separate Committee sittings, he described a number of amendments that were passed by one vote and issued what was tantamount to a threat: that this House should not look again at any part of the Bill. My hon. Friend the Minister might accepted those amendments, and they might remain in the Bill, but it does not behove the hon. Gentleman to issue a threat to this House not to exercise its jurisdiction to examine the Bill afresh and do what it likes on full consideration.

William Cash: The hon. Gentleman will acknowledge that many of the amendments were passed at the instigation of the Government and in response to the sensible recommendations of Members on both sides of the other House. If I may say so, the hon. Gentleman is speaking a lot of rot.

Stephen Hesford: The hon. Gentleman says that, but I have carefully followed the process by which the Bill has come before the House. There are several reasons why it has done so, some of which are pertinent to the debate. First, the Bill recognises that things need to be addressed; and, secondly, there is an interest on the street in the process being reformed. Those reasons matter because, as I have said already, this is not a traditional area of Labour policy or an issue that is often looked at or is easy to look at, so I congratulate my hon. Friend the Minister and the Lord Chancellor on introducing the proposals.
	We must look at what is being said and—I have touched on this already—at what is being said about what is being said. We also need to look at the proposals. The Bill is timely and, as someone who has served in Committee on two major Bills relating to the reform agenda, I welcome it. Other hon. Members will have served on those Committees—that considering the Proceeds of Crime Act 2002, which was broadly opposed by the Opposition, and that dealing with the Criminal Justice Bill, which is going through the other place at the moment. They are major parts of the reform agenda and form part of a whole package of measures. The Home Office is also considering reform of the police agenda. Again, that is all part of modernising the criminal justice system and improving access to justice.
	The Lord Chancellor and Government must be taken at face value when they say that they are genuine in their desire for reform. A more difficult issue is whether the reforms go far enough, and I ask my hon. Friend the Minister to view the Bill as just one stage in an ongoing process, not the last word in it. Having said that, for reasons that I have given before, the fact that the agenda is being tackled at all is a radical proposition in itself.
	I carefully studied proceedings in the other place, and I formed the impression that the radical nature of the agenda often was not picked up in some of the criticisms that were voiced. The Lord Chancellor and his team deserve our support and merit our congratulations.
	I want to take a few moments to trace the history of the Bill, which was a manifesto commitment. Following that commitment, the Lord Chancellor commissioned Sir Robin Auld to conduct a review, which reported in October 2001. A White Paper, "Justice for All", was published in July 2002, and we now have this Bill, which is divided into nine parts.
	Part 1, which is welcome, deals with modernising and maintaining the court system. Clause 1 lays a duty on the Lord Chancellor to provide an "efficient and effective system" to run the courts service. As I said to my hon. Friend the Minister in an intervention, the Lord Chancellor will be under a duty to lay a report on how the new system is working before both Houses of Parliament within 18 months of the Bill's enactment, which is a good thing.

William Cash: The hon. Gentleman has made one or two disparaging remarks that have fallen a bit like water of a duck's back. I want to test him. Does he agree with me that the word "accessible" should be included in the duty? After all, we are talking about access to justice. Does he agree with the Government in respect of the omission of that word?

Stephen Hesford: The hon. Gentleman is being picky. According to any reasonable reading of clause 1, the word "accessible" is implicit.
	The new executive agency is a sensible departure under the Lord Chancellor's Department. Clauses 1 and 6 replace the Court Service and the 42 magistrates courts committees with a unified court system. That is a welcome departure for the reasons set out in the Auld review. The principle of the new agency will be designed in line with suggestions from the Prime Minister's Office of Public Services Reform, set out in March 2002. The White Paper, "Justice for All", says that it is designed to
	"deliver decentralised management and local accountability within a national framework of standards and strategy direction."
	At the moment, the system is too atomised. Although there is a local element, the lack of oversight means that there is inherent inconsistency, both in court provision and in how each court works. I welcome the fact that there will be national guidelines to govern the operation of the courts through a unified system.
	The local boards will ensure that the administration of courts is focused on the needs of court users and the local community more generally. I welcome the focus that has been placed on that point. Indeed, as my hon. Friend the Minister said, local people with local knowledge of the court systems will sit on the boards and provide local input. They will be overseen by a judge.
	Clause 2 will allow flexibility in the discharge of duties in that, for the provision of judicial decision makers, functions and duties may be enacted to give more flexibility for judicial office holding.
	Part 2 deals with justices of the peace and contains provisions on how justices of the peace, district judges and magistrates should relate to each other. It will give magistrates national jurisdiction for the first time, which is a sensible reform. The Bill will abolish commission areas and petty sessions areas for the reasons set out by my hon. Friend the Minister. There will no longer be a requirement for residence, which the House will welcome because it will create a more flexible system for the appointment of justices. The Bill will create local justice areas, which may be varied by order. Lay justices will be assigned to a local justice area but a new departure will mean that lay justices will be able to sit anywhere in the country—not only on the bench to which they are assigned—provided that administrative arrangements are made with local boards and the Lord Chancellor's Department, which will increase flexibility.

David Taylor: I am a member of the Magistrates Association. The association welcomes that specific provision, subject to the important proviso that no magistrate should be required to sit on a bench on which he or she does not wish to sit.

Stephen Hesford: I am obliged to my hon. Friend for that intervention because he speaks from experience, which is always welcome in the House, and he raises an important point. My reading of the Bill does not suggest that there will be any form of coercion—my hon. Friend did not use that word but he implied it. There will be flexibility to allow lay justices to be moved around should they want to perform their duties elsewhere or if there is business to be transacted elsewhere. That is not possible at the moment and, indeed, I know that many cases are held up because benches are not available, whether that is because of a shortage or because insufficient benches can be found to take up business. Years ago on our circuit, we were held up by having to wait for stipendiary magistrates to be bussed in to clear the backlog. The new system is designed to address that problem. The hon. Member for Stone talked about access, but the reform is designed entirely to deal with access. If I am wrong about that, I shall allow him to intervene. I notice that the hon. Gentleman has stayed in his seat.
	Part 3 deals with changes to magistrates courts. I especially welcome the reform proposed in clause 45, which will give magistrates the same power to issue pre-trial rulings as in higher courts—Crown courts and the High Court. Allowing binding rulings to be issued to bring pre-trial hearings in line with procedures for the Crown court is a timely reform. My hon. Friend the Member for Nottingham, North (Mr. Allen) mentioned solicitors who take advantage of the system to string cases out simply by trying to secure adjournments for spurious reasons. The reform to allow binding rulings to be issued represents an attempt to tackle that.

Vera Baird: Although I agree with what my hon. Friend says, is it not imperative that the right of appeal against such binding rulings exists from the outset? In default of that, a trial can only go all the way to its end, after which there may be an appeal if the defendant is convicted. If the ruling was wrong in the first place, the defendant must be retried and the original trial would have been a completely wasted effort.

Stephen Hesford: I defer to my hon. and learned Friend in this sense: things must always be reviewable, but as long as neither side abuses the system the measure will be a valuable addition to the armoury of lay justices and deputy judges.
	I welcome clauses 49 and 50, which deal with reform of the family proceedings courts and youth courts. They will abolish the panels and require personal authorisation to be given to sit on those separate courts under rules made by the Lord Chancellor. That will allow for consistent authorisation of a person's fitness to sit on a specific session.
	Part 6 deals with judges and will make a simple, yet long overdue and welcome, amendment to the system. Clauses 63 and 64, as my hon. Friend the Minister said, will modernise judicial titles and change the presumption of gender in the Court of Appeal.
	Part 7 addresses procedure rules and practice directions and will allow for closer integration among all parts of the criminal justice system—magistrates courts, Crown courts and the Court of Appeal. It will establish a criminal procedure rule committee to allow the Lord Chief Justice, with the concurrence of the Lord Chancellor, to make directions governing practice in criminal courts. A similar system will exist to allow the president of the family division to make directions.
	I ask the Parliamentary Secretary to address only one thing in her winding-up speech. There is an attempt throughout the Bill to create a unified system, but there is considerable criminal jurisdiction in the divisional court. Although the divisional court is a hybrid court because it deals with other things, has any thought been given to a form of unification with the criminal jurisdiction exercised by the divisional court, which has great influence on the role and function of magistrates courts?
	Part 8 contains miscellaneous provisions. I welcome the provision to allow a single judge of the Court of Appeal to give procedural directions to speed up the work of that court, which was suggested by the Auld review. I welcome the change proposed in clause 98 to allow for periodical payments in personal injury cases. It is an excellent new departure that will benefit many claimants in the civil courts. The measure should allow civil courts to reach decisions on damages more quickly.
	In summary, I welcome the measures. I am saddened that the Opposition spokesman did not speak from a point of principle or with any enthusiasm for the measures, which are undoubtedly necessary and overdue. I look forward to sitting on the Standing Committee, if called upon to do so, and hope that the House gives the Bill a Second Reading.

David Heath: The debate has been proceeding in a measured and meticulous way, as is appropriate for such an important subject as the administration of justice in this country.
	The situation is bizarre. The Bill is presented by the Lord Chancellor's Department, but if the newspapers are to be believed we will not have a Lord Chancellor's Department by the end of the week. The excellent Select Committee on the Lord Chancellor's Department, chaired by my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), will either have to re-create itself after just one report or find itself a new title.
	I say in parenthesis that we have long supported the idea of a ministry of justice with a Secretary of State responsible to this House. If that is the genuine reforming deal advanced by the Prime Minister, to which the hon. Member for Wirral, West (Stephen Hesford) referred, it will be warmly welcomed by Liberal Democrats, but who can tell whether that is the case?

Alan Beith: I am grateful to my hon. Friend for giving way at such an early stage. Although I fully share his enthusiasm that we should have a ministry of justice, does he recognise that getting rid of the Lord Chancellor's Department raises important constitutional issues that require a fair measure of consultation which might not be possible in the time scale between now and Thursday?

David Heath: My right hon. Friend is right. All sorts of disentanglements will have to be made. One can only hope that whoever is responsible for the work of the important Lord Chancellor's Department has the opportunity to consult widely not only on the practicalities of establishing a ministry of justice, but on the constitutional position that is bound up with that of the Lord Chancellor in his magnificence and the various roles that he performs in the judiciary, the legislature and the Executive. However, I must not prolong the debate by discussing a hypothetical situation other than to say that it will be an interesting development, if anything comes of it. We look forward with anticipation to future announcements.
	There is a great deal in the Bill that we welcome. It deals with necessary reforms to the judicial system. It is equally fair to say, however, that large parts of it gave cause for concern when it was first published. Those concerns were expressed widely by political parties in another place and outside Parliament among the ranks of the magistrates themselves, who after all are directly in the firing line of many of the reforms, and those who are involved in the court process. It is to the Government's credit that they have been persuaded—sometimes by dint of losing votes in another place; at other times, by acceding to persuasion—to improve the Bill substantially. For that reason, I advise my right hon. and hon. Friends not to oppose the Bill. However, we want further improvements and there must be no backsliding on the improvements already made because they are critical.
	As I raised in an intervention on the Minister, one of the key issues is the accessibility of the justice system. We all want economy and efficiency in any publicly funded system, but efficiency can be defined in a number of ways. If the concept of efficiency is defined in such a way as to make courts more remote from the community that they serve, less accessible and with greater barriers to involvement, that is not a definition of efficiency to which I can subscribe. I suspect that many people feel the same way.
	In recent months, a succession of hon. Members on both sides of the House have expressed their concerns about what is happening to the fabric of the court system in their specific areas. For far too long, the process of court closures—particularly, but not exclusively, in rural areas—has made the process of justice more remote from the communities that it serves. That is worrying for many reasons. It has an effect on the participants, because the defendants, victims, witnesses and the police and other agencies that have to attend the courts have to go further, which sometimes causes great personal difficulties. In addition, it has a corrosive effect on the confidence in the judicial system itself because it is allied to the withdrawal of other parts of the judicial and criminal system. People, especially in rural areas, often say, "We don't see our policemen any more. You've closed the local magistrates courts. To whom do we turn for the administration of justice?" They increasingly feel cut off from the process.
	Locality is important for the provision of an effective and efficient court service.

David Kidney: I agree with everything that the hon. Gentleman says, but does he accept that it is also important that court facilities are suitable to meet the demands of modern times? Does he also agree that accessibility involves other issues, such as more use of recorded evidence, video links and, crucially, public transport links to wherever the court is located?

David Heath: I do not in any way disagree with the hon. Gentleman. However, proximity is a factor. If courts are too far away, people lose confidence because they find it increasingly difficult to access the system irrespective of how good the facilities are that have been provided.

Gareth Thomas: Will the hon. Gentleman give way?

David Heath: I have not finished responding to the previous intervention, but I shall give way.

Gareth Thomas: Is not the hon. Gentleman in danger of ruining his basic point? We are all in favour of local justice, but surely he accepts that other factors are at play, as has been said. One simply cannot have a magistrates court in every provincial rural market town in England and Wales. It is not possible. Any responsible Government have to accept the need to manage resources properly.

David Heath: It is interesting that that is an impossibility because it has been managed for centuries. We used to have a presumption of local justice administered by local people to local people. That is not an outdated concept. It is simply a matter of how resources are applied to achieve that objective. I had hoped that the hon. Gentleman was going to make a more constructive point. The problem that I raise has been encountered by hon. Members on both sides of the House. The hon. Member for Thurrock (Andrew Mackinlay) intervened on the Minister to welcome the fact that the court in his constituency, which was about to be closed, had been reprieved. I also welcome that. The Minister has shown some signs of turning around Government policy of recent years. A similar situation exists in Kingston upon Thames and there are other instances, too. Perhaps the message has got across at long last that the issue is important. The fact remains, however, that it is not enshrined in the Bill.
	I agree with the evidence given to the Select Committee by Professor Bridges of the university of Warwick, who said that alongside the basic duty in clause 1 to maintain an efficient and effective system of courts, we should add the words "and accessible". I shall certainly press for their inclusion. That stipulation would apply not just to magistrates courts, but to the Supreme Court and the county court. Every level of justice must be accessible, not in the sense of the same proximity in geographical terms, but in terms of people being able to access the judicial system that they require.

David Taylor: Does the hon. Gentleman agree that one of the pieces of evidence that shows the increasing inaccessibility of the shrinking magistrates court network is that, because local newspapers are much less likely to go to a town that is 15, 20 or 25 miles away, the coverage of the offences in question is that much more limited and so has less of an impact on criminality and the behaviour of people who believe that they can get away with it in every sense, their neighbours being unaware of the fact that they have been convicted of crimes?

David Heath: The hon. Gentleman makes an excellent point, which I know stems from his own experience. There are all sorts of factors. For instance, the availability of defence solicitors who are prepared to take on criminal work is reducing all the time, and one factor in their deciding to withdraw from criminal work is that they increasingly have to go to a remote magistrates court where the proceedings are often short and they lose half a day in their practice as a result. This is a key issue, which we shall not let drop in Committee, on which we need a great deal more clarity of policy than we have had hitherto.
	One of the problems has been that up to now there has always been a fogginess about who set the policy. Ministers say, "It's nothing to do with us, Guv. It's the magistrates courts committees that close the courts, unless we choose to reprieve them on appeal," and the magistrates courts committees say, "It's nothing to do with us. We are working within a budget and parameters set by the Lord Chancellor's Department and we have no choice other than to close local courts." I know for a fact that there are many courts whose closure plans are in abeyance awaiting the outcome of the Bill. Their magistrates courts committees do not want to close courts within their area, but know that they will have to unless the responsibility is moved somewhere else, in which case they can say that it is up to the Minister or the courts boards to do what they think is necessary. We need a clear policy that locality proximity is important in the administration of magistrates courts.
	Reference has already been made to the lack of inclusion of the family division in this unified process. We have to make the best and most effective use of the buildings that we have. Very often, co-location is an important part of the equation of maintaining a local judicial and magistrates presence in a smaller town. That needs to be addressed.
	The second issue is exactly what the courts boards will do. To what degree will they have any role beyond the consultative, if they are to have any at all? How many will there be? We have heard the figure of 42, which is the same as the number of police authorities. I can see the argument for coterminosity between police, judicial and prosecution authorities, and so on. I am all for clarity in this issue, which enables proper accountability, but the Minister will understand that the geographical scope of police authorities is hugely different. We have some small county forces and some enormous joint forces. The Avon and Somerset constabulary is towards the upper end and Thames Valley, Greater Manchester and the West Midlands police cover large areas where the degree of local accountability will be very different. If we are moving to better local accountability in terms of police, built on a basic command unit, will the legislation have the scope and flexibility to enable the court systems also to move towards that new coterminosity that deals with a smaller unit that relates to the location in which people live and work? That again is something that we need to address.
	My third point concerns access denied by the fee structure. That has already been exemplified by the hon. Member for Stone and others. We know, largely because the Law Society has been fighting an effective battle on the issue, that that was a policy introduced by stealth by the previous Administration, which has little basis in a reasoned view of what ought to happen within our civil court system. Surely, the resolution of disputes by legal means is a public good, and something that we should want to happen. We should not create barriers that may produce less access in future.
	The Law Society said:
	"full cost recovery is wrong in principle, requires levels of fees that limit access to justice and is limiting court resources to such an extent that the inefficiency of the courts is undermining the Woolf reforms."
	The Civil Justice Council, the body that the Government have to consult, says:
	"the greatest threat to service provision is that fee increases may generate a vicious circle by dissuading potential litigants from using the courts, with the resultant reduced volume necessitating greater fee increases and more court closures."
	This is a serious issue, particularly if new costs result from efforts to improve the overall efficiency of the courts. We have already heard some of the difficulties involved with the IT systems that the Lord Chancellor's Department is trying to bring in. We know that that is an argument both for and against unification, in that one problem was the number of different magistrates courts committees trying to introduce the IT while at the same time the overall driving of the contract by a centralised Lord Chancellor's Department was a disaster. However, that is a matter that we need to address on another day.
	If those extra costs are to be loaded on to litigants, we will increasingly have a barrier to effective justice. We have a vicious circle whereby the fewer people who can access justice by this means, the greater are the costs that are loaded on those who do, which means that we end up with justice for the rich but not for the poor, and that cannot be right in our civil legal system.

Douglas Hogg: Does the hon. Gentleman agree that the House has little power to control the level of fees prescribed by the Lord Chancellor, not least because the order is subject only to the negative procedure?

David Heath: The right hon. and learned Gentleman makes a valid point. As far as I know, the policy has never been spelled out; it has simply become a matter of usage within the Department and within the administration of our courts, and that is not an acceptable way for us to be doing business. I hope that the Bill will be a vehicle to explore the matter more fully.
	There are clearly problems with the collection of fines, which it is right that we should address. One is whether fines officers will substitute their judgment for the judgment of the court in terms of its sentence. That is a legitimate concern that needs to be addressed. I hope that we will consider the collection and the administration of fines in the round and take a much more radical approach than we have hitherto. We debated the matter when we considered the Criminal Justice Bill. Because of the legislative incontinence of the Home Office and the Lord Chancellor's Department we always have half a dozen Bills going on at the same time, all dealing with little bits of the same problem, and piecing them all together to make sense of what is happening is often difficult. There are ideas about different sanctions that can be applied to fine defaulters; not simply bullying them into paying but finding ways of sequestrating assets, for instance. One suggestion was to refuse access to a motor vehicle to someone convicted of a motoring offence who refuses to pay their fine. That seems a perfectly proper approach, which should be explored. The hon. Member for Rayleigh (Mr. Francois) put forward the idea—I shall mention it because he happens to be in the Chamber—that defaulting on a fine should be a blot on a person's credit rating as is a county court judgment. Why on earth not? If somebody is in a position whereby they can pay, but will not pay, there should be some sanction other than a simple procedure by the court. Those are matters that we should explore in more detail.
	My final point concerns third-party costs. The Parliamentary Secretary got herself into a bit of a muddle by saying that the Select Committee on the Lord Chancellor's Department was in a bit of a muddle—it clearly was not, because it was properly addressing the issue of the regulations that the Government intend to introduce. We need to see those regulations early on in the Bill's proceedings, before reaching the appropriate point in Committee.
	There is a huge amount of disquiet about the way in which cases are brought to court, but then cracked by the activities of some people in the media who do not seem to understand the consequences of their actions in promoting the stories of people involved in the case or directly paying witnesses or police officers. In the case of police officers, that is a disgraceful activity. The evidence given by senior editors in the newspaper world that they make such payments as a matter of course is not surprising, but it is a matter of extreme regret that we need to address. As regards witnesses whom people are firmly expecting to give evidence in the case concerned, newspaper editors have to be brought personally to heel. The bland assurances from the Press Complaints Commission that everything is in hand and that changes in its own internal disciplinary measures are having the desired effect cannot be taken at face value. I had rather hoped that the new chairman of the Press Complaints Commission might have taken a less anodyne view of his responsibilities than would appear to be the case in his initial response to the recent case in question. I hope that we can take a robust line on that in Committee and that this House can arrive at a consensus that has some teeth in giving the courts the ability properly to deal with a significant nuisance.
	The Bill contains much that is good, as well as some measures that are an awful lot better than they were and some that still need to be improved. Overall, no one would deny that if we are to have an effective, efficient and accessible legal system, we can do better than the present arrangements allow for. Perhaps, under the tutelage of whoever emerges from the events that we are told may happen later this week—whichever personage finds themselves in charge—there will be an opportunity to improve matters. I hope that there will be co-ordination between Departments to bring the issues together so that we have a system that is understandable, comprehensive and comprehensible and can move forward in a reasoned way.

Ross Cranston: I support the main thrust of the Bill: that is, the creation of unified administration for the courts, which has been widely accepted as a laudable aim. It came out of the report of Sir Robin Auld—an excellent report that has driven other legislation that has been introduced or passed by this House. Unification will introduce flexibility in terms of resources, allow a transfer of human resources—for example, between different courts—and generally make the administration of justice more efficient. Like my hon. Friend the Member for Wirral, West (Stephen Hesford), I welcome the Bill on that basis.
	One aspect of unified administration is the introduction of courts boards as a move away from magistrates courts committees. One advantage of the new courts boards is that they will be more representative, because they will include not only magistrates, but court users and members of local communities, which is a very good thing. They will also have to develop annual business plans and scrutinise the work of court management, which will be subject to national inspection. That can only produce a more efficient court service. I very much welcome unified administration.
	The hon. Member for Stone (Mr. Cash) flagged up the Law Society's concerns about a unified family court system, although that is not part of the Bill. Other countries have that system, and that may well be the direction in which we have to go in future.
	The Select Committee on the Lord Chancellor's Department, of which I am a member, and which is ably chaired by the right hon. Member for Berwick-upon-Tweed (Mr. Beith), asked how courts boards will work in practice. We were presented with conflicting evidence. The Magistrates Association said that they should be more managerial, while the Justices' Clerks Society were reluctant for judicial members to be involved in the boards if they were to deal with management. The Committee recommended that the Government spell out to a greater extent how the boards will operate in practice, and I shall not resile from having signed up to that suggestion. I found the Parliamentary Secretary, Lord Chancellor's Department, my hon. Friend the Member for Pontefract and Castleford (Yvette Cooper) persuasive when she said that we should let courts boards develop organically, but it would be helpful to the House if in the course of the Bill's passage—by Third Reading, say—the Government could spell out with greater clarity how they expect them to do so.
	Let me comment on three specific aspects of the Bill before I address two more general issues. The first aspect is fine enforcement, which various hon. Members have mentioned. There is no doubt that we have to improve the fine enforcement system, and I congratulate my hon. Friend the Parliamentary Secretary—she was in her place a moment ago, but she has now moved away. Over 18 months, she has done a lot in terms of putting additional investment into the enforcement of fines, as well as making other changes such as getting access to defaulters' names and addresses from the Department for Work and Pensions.
	Improvements have occurred on the administrative side, too, and the Bill underpins those with some desirable legislative changes, which are generally accepted. For example, the Magistrates Association says that it is now satisfied that magistrates will retain judicial control of fine officers and that it is therefore prepared to support the proposal. It also supports the notion of piloting the range of sanctions to find out how vehicle clamping, discounts and so on work in practice before they are introduced nationally. That must be the way to go.
	One concern is the ability to pay. As some Opposition Members said, when fines are imposed the judge or the magistrate should take into account whether the defendant is able to pay. Often, however, that judgment will not be well informed, so when the enforcement officers turn up and try to extract the fine they have no luck. That is sometimes because there has been a change in the person's circumstances—for example, they were in employment, but are no longer, or thought that they would have the money to pay, but no longer have it.
	Of course, in some cases people refuse to pay, and the various sanctions that are to be piloted are therefore important. However, it is incumbent on us to draw the Government's attention to the notion of ability to pay. I welcome the fact that they are considering some sort of advice network, which will be developed in courts to provide support and advice for those who run into difficulties with paying fines.

Douglas Hogg: Although I understand why the hon. and learned Gentleman welcomes such flexibility, I am sure that he wants to emphasise that fines are a penalty, which is intended—at least to some extent—to be a burden on those who have been fined.

Ross Cranston: I agree. Perhaps I should have declared at the outset that I sit as a recorder. In the few cases that I get that warrant a fine, I am reluctant to impose one because the system of enforcement is so discredited, and I want the penalty to bite. The right hon. and learned Gentleman was right to make that point. In those cases I impose a different penalty, although imposing a fine would be better if I knew that it would be paid.
	My second specific point is about improvements in court security. A couple of lamentable attacks on judges have occurred, and the Bill tries to deal with that. Several of my hon. Friends have mentioned the need to improve support for victims and witnesses. Victim Support already does that—for example, in Dudley magistrates court, where its representatives welcome witnesses, give support throughout the day and provide an excellent service. The Bill contemplates infringing civil liberties—through searches, for example—and we need not only administrative and financial measures but some legislative powers to support victims. I welcome the provisions on that.
	Thirdly, I want to consider periodic payments. The subject has a long history, and an important Law Commission report was produced on it a couple of years ago. In principle, periodic payments are a good idea because three, four or five years after an accident it is difficult to make a judgment, which covers a lifetime, about the amount of damages that should be paid. Periodic payments would tackle that difficulty. However, there are some problems with the Bill's proposals. My hon. Friend the Member for Hendon (Mr. Dismore) wanted to catch your eye, Madam Deputy Speaker, but had to attend a function. He would have raised those matters—and he may yet return.
	The Law Society raised the subject of part 36 payments, and the effect of periodic payments on them. Evidence was given to the Select Committee that periodic payments would give rise to satellite litigation. I do not accept that view, but it was presented to us. Another problem is that clauses 98 and 99 make periodic payments compulsory, which the Law Commission did not recommend. The Parliamentary Secretary, Lord Chancellor's Department, my hon. Friend the Member for Doncaster, Central (Ms Winterton) should at least be aware that my hon. Friend the Member for Hendon will approach her about periodic payments.
	I now want to consider the two general issues that arise from the Bill. Part 6 deals with judges and includes a long overdue provision about judicial titles in the Court of Appeal. Provisions covering magistrates appear throughout the Bill, including provisions for improving their training. My hon. Friend the Member for Nottingham, North (Mr. Allen), who is no longer in his place, mentioned the strength of the magistracy. I understand that it is under strength by some 3,000. I believe that my hon. Friend the Parliamentary Secretary may tell us in her winding-up speech that a national campaign to recruit magistrates will be conducted shortly. That is good.
	Clause 29 deals with the independence of justices' clerks. I understand that the Justices' Clerks Society is now happy with the provision, which underlines its members' independence. Part 5 includes a clause that provides that court inspection should not undermine judicial independence.
	Too often, we forget the crucial role of judicial independence in our constitutional framework. We need only consider countries such as Zimbabwe, where the concept has been perverted, to appreciate the tragic consequences of not respecting judicial independence. We are fortunate in this country in having a higher judiciary that is not only expert but incorruptible. Again, perhaps I should declare an interest as a member of the Bar. I believe that incorruptibility derives from the fact that we have an independent Bar. Independence is a habit of mind, and the culture fosters independence and enables individual members to eschew conflicts of interest.

Gareth Thomas: My hon. and learned Friend makes an important point about judicial independence, but does he accept that the way in which judges are appointed militates against that noble aspiration?

Ross Cranston: I do not understand my hon. Friend's exact point. There may be a point about judges' representativeness, but the way in which they are appointed in this country strengthens the notion of judicial independence because, unlike what happens in the United States, there is no suggestion that appointments are made on a political basis.

Vera Baird: Perhaps I am more bluntly spoken than my hon. Friend the Member for Clwyd, West (Gareth Thomas), but is not it fairly well known at the Bar that those who ingratiate get on? That does not encourage independence.

Ross Cranston: I cannot accept my hon. and learned Friend's point. Judicial appointments are made neutrally, and depend on merit. Perhaps my hon. and learned Friend can give specific examples to cure my naivety, if naivety it be.
	Judicial independence requires mutual respect between institutions. The House must accept that some judicial review or sentencing decisions do not fit a specific political agenda. Sometimes the media approach me for comments on cases. They ask, "Do you want to comment on that sentence?" I am always reluctant to do that because I do not know the background, and I have not read the papers or heard the argument in court. We should be reluctant to condemn decisions immediately when we do not know the background.
	By the same token, there must be judicial deference. I have presented that rather unorthodox view for several years, even when the Opposition were in government. I said that judicial review was going too far, that judges had to respect the legitimacy of Parliament and that there was the matter of institutional competence. Judges are not always institutionally competent because they do not have access to the same range of information as Parliament. All I am saying is that judicial independence is a crucial aspect of our constitutional arrangements, but it requires mutual respect from both Parliament and the judiciary.
	The issue of access has been raised by the hon. Member for Somerton and Frome (Mr. Heath) and others. I got the impression that the hon. Gentleman was talking about physical access, in terms of the courts being in the appropriate geographical area and providing access in that way. My hon. Friend the Member for Stafford (Mr. Kidney) made the valid point that there was a history of people being unable to travel long distances, but that in this day and age, although there was a case for having local courts, we had to take into account the fact that we could use video links, or provide good public transport so that people could get to the nearest large town.
	I accept the point about geographical access. I know that if there were any attempt to close down the Dudley magistrates court, I would be raising hell with the Minister. I think that we all, as local MPs, take a similar view. I would caution against taking that point too far, however. The Select Committee raised the issue of whether access to the court should be included in clause 1. Clause 82, as amended in the other place, already contains a provision that any power to make civil procedure rules is to be exercised with a view to securing that
	"the system of civil justice is accessible, fair and efficient".
	Changing clause 1 would, therefore, accord with how the Bill already reads.
	Court fees have been mentioned. That is one aspect of access to justice. My hon. Friend the Member for Clwyd, West (Gareth Thomas) rightly pointed out that the notion of full costs recovery was introduced by the Conservatives when they were in government, and that we took it forward. We have modified it, and page 38 of the evidence in volume II of the Select Committee's report carries an explanation by the Lord Chancellor's Department of how court fees are set, in terms of trying to further the notion of promoting access to justice. It is pointed out, for example, that it is impossible to provide completely open access, that resource constraints
	"would militate against the removal of court fees for all",
	and that removing all court fees would result in "weak and unmeritorious claims". There is also an explanation of how fees are waived in particular cases.
	The more general point that I want to make is that the notion of access to justice is an extremely difficult one. Resources are an important dimension, as I have just mentioned. Another, which was touched on in the explanation by the Lord Chancellor's Department, is that we cannot provide for everyone in the community the same access as, for example, large corporations have to the commercial court in London. We have to be realistic about this; it is just not possible. We must, however, accord access to justice, and try to meet legal needs. There has been a great deal of research into legal needs, and into how many people have legal needs that are not met. We also have to provide a system of justice that will afford an avenue for people to vindicate their rights. There is no doubt about that.
	There are also collective benefits that result from any system of justice—the benefit of providing new law, for example. It is not just the individual who benefits from bringing a case and winning it; the case might lead to a beneficial change in the law. I commend my hon. Friend the Minister, because I have attended at least one seminar at which she has put forward the argument that providing access to justice can, in some cases, address issues of deprivation. I think that the argument is that—I am not putting this in her terms—sometimes problems come in clusters.
	A person who is unfairly dismissed and loses their job, for example, might get into difficulty with their landlord, as well as being subject to strains in the family that might lead to family disputes. If we could address the first problem, the consequential problems might not arise. In such circumstances, we would be dealing with a situation in which providing access to justice not only provided benefit to the person winning or losing the case but had a wider social benefit. I congratulate the Law Society on its submission, because it raised the more general issue of the collective benefit that access to justice can provide.
	There are difficulties, however. We cannot provide unlimited access to justice. In a sense, we rank claims. We say, for example, that criminal claims should have first bite of the legal aid budget, because they involve the liberty of the subject. We then try to rank other kinds of claims. We rank immigration claims quite highly, because in some cases they deal with the right of people to claim asylum. It is difficult, however, after ranking important claims such as those, to rank other claims. Should we, for example, rank the claim of a tenant over that of an employee, or that of a personal injury victim over one involving family matters?
	I do not have time to address this point, and it goes well beyond the provisions of the Bill, but I believe that we have to be a lot more inventive about the way in which we provide access to justice institutionally. I have always been a great proponent of small claims courts, and there are further alternative dispute resolution methods that can provide suitable access to justice.

David Taylor: My hon. and learned Friend mentioned that he had always been a major proponent of small claims courts. I have sent debts owed to me to a small claims court when I was operating as a freelance accountant, and sometimes found it very difficult to enforce the judgment of the court. Does my hon. and learned Friend regret that—so far as I can see—there are no provisions in the Bill to extend the improved powers of fine enforcement from magistrates courts to the civil end of the spectrum? That is a real need that must be met.

Ross Cranston: There is a problem there, and my hon. Friend is not the only one to have obtained a successful judgment in a small claims court, only to have problems in enforcing it. We must address that issue. There is a consultation paper on enforcement; a report was also made to the Lord Chancellor's Department on the issue. Enforcement is absolutely vital. I am digressing much too far from the Bill, but I must say that I was always a proponent of a separate system of small claims courts—as is found in other countries—rather than putting such cases into the county courts. That would create a whole new culture in terms of their operation; that, however, is a subject for another day.

Humfrey Malins: May I declare an interest as a solicitor, a recorder of the Crown court and a deputy district judge? I want to try, in the few minutes available to me, to be helpful to the Government and to focus on the issue of fines, especially those matters covered in clauses 36 and 37 and schedule 3 of the Bill. The ladies and gentlemen who drafted those provisions are undoubtedly well intentioned, but equally certainly, they lack an understanding of the real world of the courts in which some of us sit, week after week, in the tougher parts of London. Increasingly, I find policies enshrined in Bills of 120 clauses—Bills that need have no more than 20 clauses—which have very little relevance to what is going on in the real world.
	The scandal of unpaid fines—it is a shocking scandal, particularly in the London area—needs to be drawn to the attention of a wider audience. We all know that the vast majority of criminal cases are decided in the magistrates courts. We also know that the vast majority of disposals in the magistrates courts take place by way of fines. Public confidence in the policies governing the imposing and collecting of fines is therefore vital; without it, the system would lose all credibility.
	Thousands of defendants in the London magistrates courts—there are 20 or more tough magistrates courts within a 10 or 15-mile radius of the House—are putting two fingers up to the legal system and the judiciary by refusing to pay fines that are now becoming almost voluntary, and by and large they are getting away with it. In 2001–02, the fines imposed by magistrates courts in the Greater London area amounted to £77 million. One might expect most or all of that to have been recovered, and one might expect most of those who had defaulted on purpose to have received a short sharp custodial sentence. Far from it: nearly £42 million of the £77 million was, in effect, written off—remitted by the courts as being unrecoverable, or written off in itself. That amounts to nearly 60 per cent. of the fines imposed.
	Why are the fines not collected? It is not hard to understand the reasons. Let us suppose that you and I, Madam Deputy Speaker, were brought before a court and fined. No doubt we would try to pay promptly—indeed, Madam Deputy Speaker, you might pay more promptly than I. But let us picture a court in which a defendant is appearing before a district judge for non-payment of fines. What will the district judge do?
	There was a time when it was relatively straightforward to impose a custodial sentence on an absolute defaulter, but it is now becoming rather difficult. The court has to go through a series of questions before it can take a really harsh view. That is set in stone. It should be remembered that the defendant will have been fined a few weeks ago, and that the question of his or her means will have already been dealt with. He or she is before the court as a non-payer.
	The court, strangled by regulation week after week, must take a number of laborious procedural steps before it can consider a custodial sentence for non-payment. Would an attachment of earnings order be right? Most people who appear in the London courts are out of work or else claim to be, so there is no point in that. What about a deduction of benefit? The most that can be deducted is £2 a week, and the process costs more than the result. What about sending in the bailiffs—a power trumpeted by the Minister earlier today, and referred to in the Bill? That policy has been around for years. It is utterly ineffective. Most defendants who are not going to pay have few items of value, or, if they have some, secrete them. Bailiffs give plenty of notice before calling, and I venture to suggest that the recovery of fines through their visits amounts to very little. No doubt the Minister can give me the figures.
	What about an action in the county court? That is too expensive, because the magistrates court must pay the summons fee. What about a money payment supervision order? What is that, it may be asked? It merely passes the defendant to the probation service, which, apparently, tries to help the defendant to pay but provides no sanction when it comes to an unwilling payer. Then there is the absurdity of the attendance centre order, which can only be made against those under 21. The courts have got wise to the fact that such orders are not harsh. It is a clear understanding among the judiciary that they usually mean a young person popping down to the attendance centre to play a computer game for an hour or two, and that is the end of the story. The orders are not actually made. It is a procedural nightmare, and it is an ineffective system—often made the more galling for those sitting in judgment by the obvious ring of the mobile phone in the defendant's pocket while he is explaining why he cannot pay the fine.
	What about custody? Strictly speaking, even today, if a defendant is found guilty of wilful neglect or culpable refusal to pay the fine, it is possible eventually to impose a custodial sentence; but believe me, it is necessary to go through all the processes I described earlier—laboriously, for hours—before it is possible to get anywhere near that.

David Kidney: The hon. Gentleman said earlier that the courts were strangled by regulation, but is not the situation that he has described a consequence of High Court judgments? Has not the law led to the procedure in the magistrates courts? Is he calling for legislation to make it easier to send people to prison for not paying fines?

Humfrey Malins: I am afraid I am. I will be blunt. It is time to make it easier to send people to prison for non-payment of fines, and to give courts discretion to do so. While the number of unpaid fines is going up and up, the number of relevant custodial sentences is going down and down. In 2001, only 42 people received custodial sentences. A couple of years earlier more than double that number received such sentences, and even more received them before that.
	There was a time when fines were recovered much more effectively. A metropolitan stipendiary of my acquaintance would look at his list of, say, 30 fine defaulters at 10 am, and summon them. He would have the first three up one by one, and, if not entirely satisfied by their explanations, would immediately commit them to prison for a fortnight. He would say to the other 27, "Why don't you wait in the hall, and make a couple of phone calls if you want?" A couple of phone calls? There would be at least 27. The money would be pouring in by lunchtime, and the first three were usually released by teatime anyway. That is how it worked.
	I am not saying that we should return to that arrangement immediately; I simply say that we must understand that there are thousands of fine defaulters in the London area who could pay but will not pay. These are the young people who say, "I am out of work"—but then the mobile phone rings, and in answer to a question they will say, "Yes, I smoke 20 cigarettes a day and drink two pints of lager a night. Why the hell shouldn't I?" There is an answer to that: the fine comes first. But it does not. Young people who do not want to pay—and it is mostly young people—are putting two fingers up to the whole legal system.
	I hope I may be forgiven for saying this, but those who come to court wearing suits and apologise profusely for not insuring their cars owing to an oversight pay immediately. Those in work pay. What about those who are out of work, or not quite out of work? That is where we will need a much tougher approach.
	Let us have a little look at what the Bill does. I am not sure that it does an awful lot. I offer a word of advice to the Government. It is not perhaps entirely the fault of the fine defaulter. We must have a sensible policy on collecting and imposing fines. Across London and in many parts of the country the fines imposed are not realistic: they are too high. What is the point of having a guideline? Who issues these guidelines? I have never taken any notice of them. Someone must issue them. Is it the Lord Chancellor's Department or the Court of Appeal? Perhaps the Minister will tell me. Somebody somewhere issues guidelines to magistrates. What is the point of a magistrate imposing a £600 fine on someone for no insurance on a motor car when the car is worth only 150 quid? That is the reality in London. In the days of the wild west the young man needed his horse, and in the same way the young man in London needs his wheels, and they cost 150 quid a time. Imagine fining someone six times the value of his car for no insurance. There would be a few red faces in the House. It is unrealistic.

Alan Beith: Surely the purpose of insurance is not to enable the gentleman to replace the car—he has probably only got third party insurance—but to ensure that someone who is injured by his activities is covered for the injury and damage that they suffer.

Humfrey Malins: The right hon. Gentleman is right, but my point is slightly different. We must recognise the world in which someone gets their wheels for a couple of hundred pounds and does not insure the car. They are wrong, and perhaps it is time for a national compulsory third-party insurance scheme funded by the state. People could buy comprehensive insurance as a top-up. I have often argued for that. Many of these youngsters do not insure their cars.
	I do not know what my car is worth—I wish I had not started that sentence. Let us assume that hon. Members in the Chamber have cars worth a modest £5,000—I really wish I had not started this argument. What is the point of fining someone £20,000, which is four times the value of the car? It breaks people. There should be a realistic fine. I would much rather a low fine and disqualification than an absurd fine that will not be paid. Fines should be realistic. We should find out what will work, so that we have a better chance of collecting the fines.
	What does the Bill do? It is terrific stuff. I am told that the Lord Chancellor, in a pilot area, can designate a fines officer, whose role it will be to manage the collection and enforcement of fines. Well, there we are. As I understand it, the court will impose a fine and will hand over enforcement to the fines collection officer. This gets better by the moment. Who is the fines officer? Is it the clerk to the justices or a court employee? Does the person work in the building? Do they have judicial training, and are they part of the judiciary? Will it be a full-time post?
	I understand that discounts will be available if the collection order—apparently, there is something called a collection order—requires the fine to be paid within a specified period and it is paid before the expiry of that period. That sounds terrific, but just imagine the bureaucracy involved in calculating discounts.
	I have a serious question for the Minister. I may be on to a good point, but I am not sure. I understand that these discounts are available when there is a collection order, and there is a collection order when someone is fined and they are given time to pay. Does the person who receives the following homily from the magistrate have a discount? The magistrate says, "Stand up, Smith. You've pleaded guilty to drunken driving, you're fined £500 and disqualified for one year"; and Smith says, "I'll pay straight away" and out comes the money. I am not sure that a collection order has been made. I will be corrected if I am wrong. If it has not, is there a discount for such a person? I simply do not know.
	Funnily enough, I have never been much of a fan—[Interruption.] The hon. and learned Member for Dudley, North (Ross Cranston) intervenes on me mildly from a sedentary position to the effect that he has never come across someone paying a fine straight away. Sometimes people do. I did. Perhaps I should not have said that. It was 25 years ago on a speeding charge, but that is all by the way. If people pay straight away, do they get a discount? That is a serious point. I am not happy about some judicial functions moving to the collections officer. I think that the collections officer has the power to say, "We'll extend this a bit". I shall be corrected if I am wrong, but as far as I can see he or she has the power to vary a decision by a district judge. If that is right, I am not sure that it is a good idea. I should very much like that point to be considered.
	To top everything, there is an appeals system against a fines officer's decision. That is a recipe for bureaucracy. The fines officer, who will be a shining example, has to serve notice on the defendant that he intends to do something. That is most interesting. It is good news that the fines officer will write to the defendant saying that he will enforce the fine by a certain method, thus inadvertently giving the defendant notice that he can so arrange his affairs as not to have to pay the fine.
	The Bill contains the majestic little passage that says that the fines officer can issue a distress warrant. We have done that before. It is as though we have never had such a policy, but it has been in existence for X number of years. It beggars belief that the Minister should suggest that the fact that the distress warrant is now in the hands of the fines officer, as opposed to the magistrate, is a new development that will really help.
	Then there is registering the fine in the register of judgments. That is irrelevant. I cannot think of a defendant in the Camberwell Green area who would be the slightest bit concerned whether the fine was registered in the register of judgments or not; ditto on the attachment of earnings order and—this is the best bit—on the taking of other steps. I do not know what other steps the fines officer will take, except the new, magic clamping order to fit an immobilisation device on a vehicle that is registered in the defendant's name. This is a serious point. If a car is registered in a person's name, they could lose their livelihood and job if their car is clamped. That may be a minor problem.
	I think that the Bill provides that the vehicle that is to be clamped and seized must be registered in the defendant's name. The Minister must correct me straight away if I am wrong, because otherwise the next 15 seconds of my speech will be completely irrelevant. She has not done so, so I assume that it is right that the vehicle must be registered in the defendant's name. Does anyone believe that any of these vehicles in the east end are registered in the defendant's name or in anyone's name? Of course they are not, and it is nonsense to suggest that. I do not think that anyone has been down the Old Kent road or sat at Thames court.

Rosie Winterton: I live there.

Humfrey Malins: The Minister says that she lives there, but she does not spend time at Thames court in Bow and Poplar. The truth is that cars are not registered. People who get their cars registered in their name, pay their fines.
	This is the absolute clincher. What happens if the defendant removes the clamp from his vehicle? He can be fined!

Gareth Thomas: It is a pleasure to follow the hon. Member for Woking (Mr. Malins). He made an amusing speech and we have benefited from his experience as a recorder. Judging from what he has told us, I certainly would not want to appear before him either as a defendant or a lawyer. He talked a lot of sense, as did my hon. and learned Friend the Member for Dudley, North (Ross Cranston), who gave an account of the chaos in the fines collection system. It is a travesty and a scandal, as the hon. Member for Woking said, that the fines system is something of a voluntary system. Something must be done about it but I do not share his scepticism because I think that the Government have taken on board the fact that there is a need to improve performance.
	Performance in different parts of the country varies greatly. The collection rate is 40 per cent. in some, and 80 per cent. in others. If ever there were an illustration of why the system needs to be modernised and reformed, that is one. There are others. That is the principle behind the Bill. It goes a considerable way to modernising our rather ad hoc criminal justice system, which is the product of historical accident and accretion from the time of the Norman kings, Henry I and the Plantagenets.
	The system is in need of reform. Magistrates courts committees are an outmoded way of dealing with the need for an efficient and local system of summary justice. The Government are right to take account of the public interest in ensuring a credible criminal justice system. We will probably have to revisit the subject in a few years but we must surely all agree with the principle behind the Bill, which is to ensure a more effective and efficient system. There is a case for unifying the administration of the various courts, which is the basis of clause 1.
	The Bill is the product of considerable consultation and deliberation. The Government have been most intelligent in their response to the various arguments. I have had the privilege of appearing before various magistrates courts as a lawyer. Some of them were in pretty awful buildings that were inadequate, inappropriate and insecure. One could not have a private conversation with a client. Local courts need to be in physical proximity to population centres but that must be qualified by the need to ensure appropriate court buildings.
	It is sometimes exasperating to appear before a bench of local magistrates. That reminds me of an experience that I had appearing with a colleague at the Bar, who in his exasperation and frustration in being unable to get a point over to the magistrates was driven to say, "Your worships, I always thought that a bench was something thick and immoveable and you are no exception."
	Those comments do not apply to our Front-Bench team and I am probably driven to say that they do not apply to those on the Opposition Benches either. A lot of good sense has been spoken in the debate. The Government have made a commitment to maintain the lay magistracy. I would like the Parliamentary Secretary to re-emphasise that commitment in her reply. It is essential that the pluralism of our society is maintained. A healthy civil society must be committed to ensuring that there is a strong connection between criminal justice and local lay representatives but there is a need for a new Executive agency and the Government are to be congratulated on grasping that nettle.
	Of course, there is tension between the understandable pressure on central Government to make resources go further and the need to ensure that justice is local. The Government have grappled with that. I am pleased that they moved, as I understand it, an amendment to require local boards to be consulted by the court agency. That is a safeguard. It will ensure that there will be a proper and appropriate local connection when justice is dispensed in magistrates courts—over 90 per cent. of criminal cases are dealt with by magistrates courts—but there is a need to ensure a more efficient central system.
	Other measures in the Bill are long overdue. We have heard reference to the chaotic system of fines collection. The power to enact pilot schemes is an effective way of proceeding. There is no monopoly of wisdom on how to do it but we need to deal with the matter. I am sure that the Parliamentary Secretary is well aware that there is a crisis that undermines people's confidence in the credibility of our criminal justice system.
	There are clauses dealing with the need to bring about procedural changes, aligning the procedure in the Crown courts with that in the magistrates courts. That is overdue, as are the welcome provisions to improve court security. There is a brave stab at codification of criminal procedure. It comes to something when one hears judges sitting in the court of criminal appeal decrying the over-complex nature of criminal law and procedure. There is a need for us to look again at that and to codify the procedure.
	Reference has already been made to the corrosive effect of cheque-book journalism on the outcome of criminal cases. It is welcome that the Bill will allow, in the context of criminal proceedings, third party costs orders, which have been made under civil jurisdiction for some time, to be made in criminal courts. That may put a useful brake upon the abuse of the system carried out by unscrupulous journalists. A number of notable cases have come to grief because of abuse by the press.
	In an intervention, I expressed some scepticism about the inflation of court fees and the effect that that is having upon access to justice. It is a characteristic of any state that it provides a peaceful method of resolving disputes. Any reasonable state should subsidise that and ensure that there is a system available to litigate effectively. People should not be unduly excluded from that. I take on board the comments of my hon. and learned Friend the Member for Dudley, North (Ross Cranston); ensuring access to justice is difficult and not always possible, but we have to do the best we can, sometimes with limited resources. The power to order periodic payments by way of damages is also welcome.
	My impression is that this is a good Bill, which is welcome and extends the Government's programme of reform to an area that is in real need of reform and modernisation.

Alan Beith: It has been a great pleasure to hear so much favourable reference made to the report of the Select Committee on the Lord Chancellor's Department, which it has been my privilege to chair. All three Front-Bench spokesmen referred to it, as did other Members. The hon. Member for Stone (Mr. Cash) was kind enough to describe it as innovative. I like to feel that it was.
	We sought to do what a Special Standing Committee can do, which is to hear the witnesses who are participants in the process and might have views that they could not otherwise put to this House. I have always felt that the Special Standing Committee procedure usefully brings together the ability to call in witnesses with the process of going through the Bill in detail. This has been a slightly different process, but we sought to identify between the Lords and Commons stages those issues about which outside bodies were particularly concerned and to draw them to the attention of Members of this House for Second Reading and for the Committee. I hope that those who serve on the Standing Committee will find that helpful and will be able to pursue some of the issues further.
	As others have said, the Committee found that there was broad acceptance of the principles, purposes and objectives of the Bill. If I do not say much about that, it is because I take it as read. There was little disagreement that measures of this kind were required. Most of the disagreement was about detail, or about the implications for long-standing practices and assumptions about how the court system works.
	The first of the recommendations that I want to highlight relates to an issue that often concerns individual Members: court closures. During our inquiry, we were aware of fears that the Bill's proposals would make it too easy for the Lord Chancellor to close courts. In practice, local magistrates courts committees have been blaming that on the Lord Chancellor for a long time, saying that the amount of money that they get locally does not allow them to maintain the number of courts or to carry out the improvements that are necessary to make individual courts suitable for modern purposes. By that, I do not mean removing attractive historic furniture but ensuring that witnesses can be treated properly, that children at a children's hearing are looked after properly in the court setting and that proper security protection is available. Those features are necessary and investment is required to bring them about.
	The combination of general stringency and the need to improve the suitability of courts for various reasons has led to a programme of closures that has gone on for many years—a couple of decades at least, and perhaps longer. No one can say that the Bill has introduced something new if it leads to the closure of courts. People are looking for some assurance that the extent to which the power is centralised will not make it easier to close courts than it is now.
	As I envisage it, the Lord Chancellor's Minister—whoever that is following the current reshuffle—will be able to be questioned in Parliament about court closures in a way that is technically not possible now because the Lord Chancellor has an appellate power; the decision, theoretically, is being taken by a different body at the moment. I have some doubt as to whether that will be enough.
	That is why the Committee laid great stress on accessibility in all its forms. As my distinguished Committee colleague, the hon. and learned Member for Dudley, North (Ross Cranston) pointed out, accessibility includes the ability to bring a case to court, including the cost factors. It includes the physical lay-out of courts and the ability of disabled people to get into courtrooms, as well as geographical accessibility. We would be pleased as a Committee to see that written into the Bill as one of the general duties of the Lord Chancellor, as well as a requirement that he consult local courts boards about any decisions that he makes about where courts can sit. Most of us know that that issue is very important to local communities. We need some assurance that the Bill will make sure that the views of local communities are more pertinent to the discussions about the future of local courts, and not less.
	The Committee highlighted the nature of courts administration councils, or as they are now called—following an amendment in the Lords—courts boards. Participants in the structure had fundamentally conflicting views about how they would operate, and how they should operate. Some participants thought that they ought to be executive bodies; others thought that under no circumstances should they be executive bodies. Some participants, including Ministers, hinted that they might in some respects be executive bodies and make management decisions; others thought that that certainly would not happen. There were disagreements about both the principle and the facts. That is a recipe for chaos and confusion, as we pointed out.
	During her introduction some four hours ago, the Minister sought to convince us that there is a middle way—a slightly worrying term—between these two extreme positions: some ground on which one can stand, whereby local communities feel that they are actually taking the decisions, even though they do not have the executive power to do so. I remain to be convinced of that, as the Committee undoubtedly will. I am not dismissive of the Minister's good faith, but there is normally a clear distinction between a decision that one can take, and a decision that one is asked about by someone who may, or may not, take notice of one's views. There are questions about the relative influence that they attach to one's views, but this remains a fundamental disagreement that is at the heart of the Bill. The House must get some clarity on it before this process is over.
	We made the point about maintaining the coterminosity of courts boards' areas with criminal justice areas. That is not because they are perfect; as my hon. Friend the Member for Somerton and Frome (Mr. Heath) noted, they are very different. However, the amalgamation of magistrates courts committees that has led us to this point, and which was supposed to be for the purpose of ensuring that all of these bodies could co-operate with each other, has been such a painful process that it would seem crazy now to go further and start carrying out more amalgamations, thereby leading to courts boards' areas actually being bigger than the criminal justice areas. Indeed, that was the point of our recommendation. If the argument that the areas should be the same had the weight that the Government attach to it—that was why they forced the amalgamation of MCCs—we should now have some stability. As long as the police areas remain as they are and bodies such as the Crown Prosecution Service work to them, courts boards' areas should remain as they are. There is indeed a case for some subdivision, but the Select Committee said that we should not go beyond coterminosity, to the point where there are fewer courts boards' areas than police authority and criminal justice areas.
	We expressed some of the concerns that had been expressed to us about the independence of justices' clerks and their special relationship with magistrates—I am not sure that that has been finally resolved—and we also asked some questions about fines officers. That has been the subject of a very interesting debate, which included a contribution from the hon. Member for Woking (Mr. Malins), who sits as a recorder in south London and gave us an insight into life in the south London courts. The Committee had a genuine anxiety about how the problem of people on very low incomes would be dealt with, and whether the powers now being considered would address that category of fine defaulters. Again, that is a matter to be explored.
	We also referred to court security. We were struck by some of the evidence that we received from members of the judiciary at all levels about the anxieties that they now have, given some of the incidents that have taken place. I was struck by the extent to which they rely on the presence in court buildings of police officers who are there for other purposes. That is a bonus, if one likes, but on several occasions incidents have either been prevented or brought to an end by police officers who were present because they were appearing as witnesses in a different case, or attending another courtroom in the same building for a different purpose. That underlines the fact that the current system of security officers does not meet all the needs of court security. We must be satisfied that it can meet those needs, and that court security officers are appropriately accountable.
	On court fees, an issue that several hon. Members have raised, we strongly recommend that the House accept the Lords amendment that requires the Lord Chancellor to have regard to the need to facilitate access to justice when setting fees. We were worried about the concept of full cost recovery, which has apparently become a part of the system by no reasoned process; rather, it has simply become the practice. Our report made reference to one witness, who said that that the concept of full cost recovery
	"fails to recognise that the courts have a public as well as a private role."
	We went on to argue that that the
	"judicial process serves important public functions by clarifying and developing the law and setting precedents for litigants to settle their cases or run their affairs, which is of wider benefit."
	Court cases that do not on the face of it appear to have an immediate wider benefit nevertheless do, especially if they prevent other cases from coming before the courts and giving rise to further expenses. Cases settle the law.
	I have often heard Ministers refer to the process of judicial review as one of the ways in which legislation is interpreted and developed, with the implication that it is desirable for some matters to come up for judicial review. If it is a public good, it may not be appropriate to expect the body of litigants generally to meet the whole cost of doing so in all cases. There is a public good element to the courts system, which should be recognised in the funding. There is mounting evidence that the court system—and full accessibility to it—cannot properly be maintained if full cost recovery is made into an inflexible principle in setting court fees.
	The final issue raised by the Select Committee that I want to address now is third-party costs. We examined it carefully and were generally sympathetic to what the Government are trying to achieve. Recent examples, some since the Government introduced their proposals, have tended to underline the need to do something about cases in which various sorts of conduct, including cheque-book journalism, lead to their destruction because a fair trial can no longer be secured. That can lead to people who are guilty not facing trial or the possibility of conviction and imprisonment, or to cases being mounted on a basis that should never have been allowed. Other sorts of misconduct can cause further expenses.
	In media cases, an important balance has to be struck between the freedom of the press and the freedom of the individual, particularly an individual's right to a fair trial. We do not believe—and the Select Committee did not believe—that that balance in any way precludes the inclusion of a third party cost power, but the balance of liberties is so important that the House should have a clearer idea of what is involved before we legislate it into existence. That is why I emphasise the Select Committee's point that the Standing Committee considering the Bill should be able to consider the draft regulations that relate to it.
	The Parliamentary Secretary was uncharacteristically confused on that point: she is not someone whom I ever associate with confusion on her brief, but there is no doubt about it and she later corrected what she said. I hope that she has my attention on that point, even if the Leader of the House is attempting to influence her on some other matter. As I said, she was unusually and uncharacteristically confused, later correcting herself, in respect of whether the regulations and the guidance were necessary or important. We were talking specifically about the regulations, without which the powers cannot be brought into existence.

Douglas Hogg: Does the right hon. Gentleman recognise as a weakness in the Bill the fact that the regulations may prescribe conduct that shall not be deemed to be misconduct, but not what is to be defined as misconduct?

Alan Beith: That could be construed as a weakness. I took it to mean that, once enacted, the regulations would enable the power to be exercised, but delimit it in certain ways. I am not sure why the provision was included, because I am not sure what sorts of conduct the Government did not want to give rise to the possibility of third party costs. The right hon. and learned Gentleman asks a fair question, which should be cleared up before this part of the Bill is enacted. We cannot understand the scope of the power unless the regulations are before us.
	Finally, I want to follow up a general point that was raised by several hon. Members—and by me in an earlier intervention. If, by the end of the week, it is not the Lord Chancellor's Department that is carrying out the powers in the Bill, but a new Ministry of Justice, a highly significant reform will have taken place. I am personally quite sympathetic to it, but that will be neither adequate nor credible without other consequential reforms to our judicial and courts system. Simply designating an hon. Member of this House as the Minister of Justice and allowing him or her to discharge the powers previously accorded to the Lord Chancellor would not resolve important questions such as who should make judicial appointments. Indeed, even more questions might arise about a member of the Executive making judicial appointments if he or she was a Member of the House of Commons, rather than of the House of Lords. Some might think that such a person would be an even more political figure than the Lord Chancellor. That would be difficult to claim for the present Lord Chancellor, but the contrast could be drawn with some previous Lord Chancellors, who had little contact with the political world before taking on the post.
	It is important for the working of all aspects of the judicial system, including the Bill, that any reform is genuine and thoroughgoing. Members of the Select Committee are certainly conscious of the anxieties of members of the judiciary about the important relationship—necessarily somewhat distant—between themselves and Parliament. Some hon. Members have made suggestions about how that relationship should operate. When the Home Secretary goes to the Police Federation conference and makes a speech that is clearly designed to ingratiate him with his audience, saying that we want judges who will help the police to do their job, he might be seen to be placing a heavy emphasis on how much credibility judges should attach to police evidence as opposed to the evidence of other witnesses in a case. Understandably, such comments cause concern among the judiciary that the relationship may become unbalanced. I counsel the Government that reforms of many aspects of the judicial system must have regard to that balance, and a quick decision about who should have what ministerial job on a Thursday afternoon is no way to resolve the major constitutional issues that my Committee has sought to consider.

David Heath: Does my right hon. Friend agree that if we are to have a Ministry of Justice—this is a hypothetical question—it is important that it derive part of its powers from the present powers not only of the Lord Chancellor but of the Home Secretary to remove his propensity to interfere in matters of justice that he is ill equipped to consider?

Alan Beith: I agree with my hon. Friend, although I do not wish to personalise the argument. I have criticised the Home Secretary, but there is a more general reason why powers that currently reside in the Home Office could usefully be grouped into a new Ministry of Justice, alongside many of the functions prescribed in the Bill. It is a difficult process and we have become aware of some of the anxieties felt by members of the judiciary about its implications. Indeed, we may at some stage report on aspects of it. My suspicion is that aspects of the issue would resound for some time for precisely the reason that I have given—that one cannot resolve the issues simply by announcing a list of new ministerial offices and duties. It might be unwise to claim too much for a mere reallocation of duties when major reform has much wider constitutional implications.

David Kidney: Like my hon. Friend the Member for Wirral, West (Stephen Hesford), I agree that the provisions of the Bill complement the provisions of other measures, including the Criminal Justice Bill, which is also passing through Parliament. I agree that it necessary to consider the two together, because that demonstrates the Government's commitment to a thoroughgoing reform of the legal system—and rightly so. There is a legitimate public interest in a system that dispenses justice to a quality that is widely respected around the world, and that must remain undiminished. However, we must also address the serious faults in the present system.
	The faults include excessive delay, inconsistent outcomes and the difficulty in some areas of addressing the legitimate needs of law-abiding users of our courts, other than those accused of crimes. The accused are, of course, innocent until proven guilty, but I have in mind witnesses, including police officers, and victims of crime, who do not always receive the consideration from the system that they are entitled to expect.
	I come to the debate as someone who, before becoming a Member of Parliament, was a solicitor for 20 years and had everyday experience of magistrates courts, county courts and Crown courts. However, I speak as a non-practising solicitor, determined to represent my constituents and my constituency, not as a hack lawyer with faint memories of how things used to be. To that end, before this debate and before debates on the Criminal Justice Bill, I embarked on a round of meetings with magistrates, magistrates courts staff, the police, the Crown Prosecution Service, the probation service and voluntary sector groups. I did not meet anybody from Victim Support, but it gave me written briefings, which I read. For brevity, I want to address the Bill by concentrating on just two issues: first, the unified system for the management of courts; and, secondly, the collection of fines.
	I am wholly in favour of a unified system to manage all our courts. Such a system would not only manage our resources more effectively and efficiently; it would also enable us to let more people than those who are busy running the courts have a say in how the courts system should be managed.
	I look forward to courts boards that are broadly representative of their communities. I look forward to their taking the—apparently narrow—brief in the Bill, running with it and making a success of their involvement in the courts system. I want them to oversee the development of courts that are genuinely accessible to their communities. As other Members have already said, accessibility includes the physical nature of the buildings; for example, disabled members of the community must be able to get into them. Accessibility means proper facilities for prosecution and defence witnesses or the witnesses on both sides of a case. It involves allowing people privacy for consultation with their lawyers. It involves adequate security so that people are safe while they are on the premises. Those are all as much aspects of accessibility as the distance that must be travelled to reach the court.
	I look forward to the new courts boards contributing to the effective management of courts in their area so that there is genuine accessibility and so that we tackle other faults.

David Taylor: I am listening carefully to my hon. Friend. Does he agree that many of the 42 existing magistrates courts committees will have taken exactly the line that he describes in reviewing the courts under their care and control? What will the new courts boards add to the process?

David Kidney: I shall deal directly with my hon. Friend's question in a moment when I talk about court closures, but his comments bring me to a point that I would have made later. I believe that we cannot praise magistrates courts often enough for their sterling work in the delivery of justice. The same goes for the staff who work in the magistrates courts and in the magistrates courts system. I am happy to say that.
	I was about to say that I would expect courts boards to reduce unnecessary delays in the management of courts in their area—for example, where too many cases are waiting to be heard at one court and other courts in the district are under-utilised. We can balance court use in order to reduce delays.
	That relates to court closures, so I shall now deal with my hon. Friend's point directly. I hope that, when an overview is taken of all the court assets in a district, the courts board can manage them in such a way as to avoid unnecessary closures of magistrates courts. In Staffordshire, my area, some hit-and-miss discussions have been held between the Court Service and the magistrates courts committee to consider whether there can be shared use of magistrates courts and county courts to avoid the complete closure of courts in one system or the other. In the past, however, that process has by no means been formal, nor has it been adopted in every case. Unification of the system would give us better and more regular opportunities to do that. That is my answer to my hon. Friend's question.
	The enforcement of fines is probably a much bigger and more important issue than some Members have recognised so far. Let us reflect on the fact that the proportion of the monetary value of fines imposed that has been collected has consistently fallen in the past decade. At the same time, the option of using fines as the sentence of disposal by courts has similarly fallen, and it is very likely that the former is the cause of the latter trend.
	It is extremely important that we satisfy the public and the sentencers that where fines are the correct choice of sentence they will be collected and paid by offenders. Otherwise, sentencers will look for other sentences. We have seen a rapid rise in our prison population, which suggests that sentences of imprisonment are sometimes imposed because fines do not seem credible to the sentencers. It is essential for humanity and the correct choice of sentence that we satisfy the courts and the public that fines will be paid when they are imposed.
	Hon. Members may remember the reports in the national press last autumn about the poor performance of some courts in collecting fines. When I met the staff of my local magistrates court to discuss their performance in collecting fines, they said that there was a noticeable drop in the payment of fines on the back of that public reporting, again showing the sensitivity of everyone outside the court system to the effectiveness of collecting fines.
	When I spoke to those at my local courts in mid-Staffordshire about collecting fines, they told me that their collection rate is much better than the national average—68 per cent. compared with 58 per cent.—but they are not happy with that performance and want to do better. They already employ enforcement officers, who try to manage the outstanding case load of fine payments. They have taken measures to attract people back into engaging with them when they are not paying their fines. They have already introduced advice sessions for people who want to pay their fines but are having difficulty doing so.
	My local court staff raised issues about the exchange of information and the speed at which other agencies co-operate with them. For example, if they want to deduct money from people's benefits, they experience a four-week delay in getting a response from the Department for Work and Pensions, but at least they say that they experience good information sharing with that Department and that they get fair co-operation from the Driver and Vehicle Licensing Agency, whereas they get no co-operation from the tax authorities.
	That was why I asked my hon. Friend the Parliamentary Secretary about the law on gaining information from other agencies for the purposes of enforcing the payment of fines. If I understood my hon. Friend correctly, she said that she would write to me to set out the position, and I then hope to make use of that information in relation to my local magistrates courts.

Alan Beith: It is an odd fact, but powers in the Anti-terrorism Crime and Security Act 2001 can be used in relation to any criminal offence that has been committed or may be committed—I presume that fine defaulting may be included—to ask the Revenue for details of people's income and various other information, so long as the request is proportionate to the offence in question.

David Kidney: I am grateful to the right hon. Gentleman for that additional information. To bandy similar information back to him, he may remember that, when we amended the Child Support Act 1991, we introduced new powers on the exchange of information in respect of collecting child support payments. If the right hon. Gentleman is interested, when I receive a reply from my hon. Friend I shall pass a copy to him.
	Imaginative ways of taking payments are being pursued in mid-Staffordshire, such as payments over the telephone, credit card payments, online payments and, obviously, meeting the enforcement officer regularly. All those measures are welcome. I suspect that my local enforcement officers will appreciate the slight addition to their powers that has been discussed in the debate so far. I agree with those who says that those powers are not staggeringly new or more extensive, and my local enforcement officers are not that impressed with giving people discounts on their fines, as they see that as an additional complication to their work and they say that their computer programmes would need to be rewritten to deal with it. I would like to people to be pretty certain that, if they do not pay fines, the money will be taken from them, whether on the day of their appearance at court, through payment from their salary, through payment from their bank account, through payment from their benefits, or through payment by way of forfeiture of vehicles. Through those methods, which should be robust, firm and virtually inevitable, I would hope that, in most cases, we could dispense with sending people to prison for not paying fines when they had not received a prison sentence in the first instance, as that was not commensurate with the seriousness of the offence that they committed. At the most severe end, a person can go to prison for not paying their fine for an offence that did not carry a prison sentence as a possible punishment at the beginning. I would therefore like to see us rely less, not more, on the threat of imprisonment for not paying fines.
	With those few comments, I wish to welcome the Bill. On its own, it is a fairly modest provision. Together with other reforms currently taking place in Parliament, however, important modernisations of the judicial system are being made, which the public outside will very much welcome.

Douglas Hogg: The hon. Member for Stafford (Mr. Kidney) said in his concluding remarks that this is a modest Bill, which it is. It is also a very technical Bill, and will therefore, I suspect, attract less public interest and attention than it deserves. As someone who has sat through most of the debate, I recognise that the Bill has been given a substantive welcome by right hon. and hon. Members. It would therefore be churlish of me not to recognise that within the Bill there is material that I should welcome. I am bound to say, however, that there is also a great deal of material in the Bill that I do not welcome. As this is a Second Reading debate, I shall focus on the latter rather than on the former.
	I want to begin by analysing to a degree what this Bill is about, its nature and its consequences. Let us be clear: this Bill, once passed, will bring about, over time, a significant change to the way in which the law is administered in this country. That process of change will not be driven by Members of the House, however, as this is an enabling Bill in its substance. Any right hon. or hon. Member who has studied the Bill with care will recognise that the instrument of change will be secondary legislation—statutory instruments brought forward by the Lord Chancellor and approved, or not approved, by the House. Once we have passed the Bill, we have put in train a process over which we, the elected Members, will have little control.
	The Parliamentary Secretary, in a candid speech of great modesty, said that she could not comment on whether a Minister of Justice will be appointed. I understand that: she is not privy to the Prime Minister's views on this matter. I for one, however, would welcome the appointment of a Minister of Justice, who would take unto himself or herself many of the powers of the Lord Chancellor and the Home Secretary and who would be present in this House. One of the aspects of the Bill that I find most disagreeable and troubling is my certain knowledge that the statutory instruments will be drafted by officials answerable to the Lord Chancellor. We do not—at least, for the most part—have the ability to question the Lord Chancellor. I am perfectly prepared to accept that he had a very distinguished civil practice at the Bar, but he knows next to nothing about the criminal law, and had very little experience of the family division when in practice. Officials—I make no criticism of them—often have very little experience outside their Department. We are also, of course, giving very great powers to the Lord Chief Justice, who is, by definition, unaccountable. The mechanisms for driving forward policy change will be outside our effective control once we have approved the Bill.
	It is true that the orders will have to be approved. The House will be familiar with clause 106, which deals with order-making powers. A few of the orders will be subject to the affirmative procedure, but most of them will not. Most will be subject to the negative procedure, and I shall mention one or two of them shortly. In effect, the negative procedure provides no control whatever while the affirmative procedure, which will apply to very few of the orders made under the Bill, will provide precious little control. As the House well knows, a statutory instrument has either to be approved in its entirety or rejected in its entirety. There is no power of amendment. We cannot include new provisions in a statutory instrument. We either approve or reject the lot. That is not a proper way to drive forward substantial change, but that is what the Bill does.
	I now turn from the general issues to deal with a few specific points. I recognise that there has been almost a consensus in approving the proposal for the abolition of the magistrates courts committees, but that consensus does not include me. I have had the pleasure of representing a Lincolnshire constituency since 1979 and, in that period, I have been pretty impressed by the way in which the Lincolnshire magistrates courts committee has performed its duty. On any view, there has been real local oversight and real local input. Will the position be substantially better under the new regime so elegantly advanced by the Parliamentary Secretary? I doubt it.
	The areas covered by the local justice boards will be determined by the Lord Chancellor, who is not accountable in this House. Why should I assume that he is more concerned about the local delivery of justice—a subject that has never perplexed him in the past—than the Lincolnshire magistrates courts committee? I do not make that assumption.
	I then ask myself whether I derive any comfort from the provisions for the courts boards. Who will appoint them? The Lord Chancellor, and is not that splendid? He will appoint every member of the courts boards, but he is not accountable to this House in any sense. When we consider the criteria, we ask whether members could be appointed in a different manner, and, of course, they could. The constitution of the courts boards implies that they will have two representatives of the justices serving on them, so why should the local justices not make those nominations? Why should the judges—the presiding the judge of the circuit, the Lord Chief Justice or perhaps the judges themselves—not be involved in choosing the judges that will serve? Why should the local authorities or another local mechanism not determine the choice of the local representatives? Why should that decision be left to the Lord Chancellor?
	I hope that the answers to those questions will be teased out in Committee. However, one thing is absolutely sure. The courts boards constitute a centralised and undemocratic structure. I hope that their composition will be made more democratic, and that they will be given substantially more authority and teeth. However, the proposals, as they stand, provide no compensation to me for the abolition of the Lincolnshire magistrates courts committee.
	Much reference has been made in the debate to accessibility to local courts. I agree that it is important that there should be the local delivery of justice. By that we mean a number of things. For example, we mean local courts, and there has been genuine consensus on that. I suspect that there has also been consensus that justice should be affordable. On that point, I am bound to say that I am pretty cautious about clause 92, which deals with the setting of fees. If justice is too expensive, it is not accessible. If you look carefully at clause 92, Madam Deputy Speaker, which I am sure that you have done, you will find that the fees and their scales and rates are determined exclusively by the Lord Chancellor with the consent of the Treasury. Anybody who hears the phrase "with the consent of the Treasury" should be deeply worried because its interests and our interests are not the same.
	I happen to agree with Labour Members who said that full recovery is a bad thing, although I was not unduly concerned with the full recovery of court fees when I was a Foreign Office Minister—perhaps I should have been. As the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and other hon. Members said, there is a public interest in the proper administration of justice. It is a scandal to run courts on the basis of fees recovered from prospective litigants, yet the Bill provides for that. The amendment made in the other place to provide that the Lord Chancellor should have regard to access to justice does not clearly state that a policy of full recovery is wrong in principle, so I hope that the Bill will be amended in Committee to reflect that fact.
	As the Bill stands, the Lord Chancellor may do as he pleases on fees, subject to the consent of the Treasury, which is no safeguard. It is true that he will have to consult but whom, pray? The judiciary. He will not have to consult the consumer and we, the elected representatives, will be cut out of the process because only the negative procedure guards the public against the level of fees. The fees will be set by the Lord Chancellor, who may do as he pleases. The Bill is largely silent on the criteria on which the fees should be fixed, so I am deeply unhappy about the fee-making power.
	Part 7 contains rule-making powers and will give judges, lawyers, officials and the Lord Chancellor substantial powers to make rules on criminal law, family law and the civil law. Of course, Bills are always written using careful language, so the Bill says that the rules are concerned with practice and procedure. That offers a great deal of reassurance, I am sure, because anyone who knows the first thing about the law knows full well that there is a marked overlap between practice and procedure on one hand and substantive law on the other. In case hon. Members did not spot that fact, which I am sure that they did, they will realise from clauses 73 and 80 that the Lord Chancellor, no less, is enabled in terms to revoke, repeal or amend any enactment as a consequence of rules passed or to facilitate the rules.
	Let us be clear about this. The Lord Chancellor, unaccountable and unquestioned by hon. Members as he is, may change statutes passed by this House to facilitate a rule. I happen to think that that is not a good idea. The Parliamentary Secretary may take a different view and I am sure that the Whips will ensure that her view prevails. However, the provision makes nonsense of the parliamentary process, which I am sure that she will come to appreciate in time.
	We now reach the little matter of third party costs, which is covered by clause 93 and has been dealt with by several hon. Members. I for one am perfectly willing to accept that on occasion it would be right to make a substantial costs order against a third party guilty of misconduct. Perhaps the most obvious example is that of newspapers which have paid witnesses who have caused cases to be aborted. There have been a number of recent examples of that. One thing is wholly plain: if we are going down that road, we would do well to prescribe in pretty clear terms in the Bill the classes of misconduct that will attract an order of third party costs.
	Naturally, being a keen-minded chap, I asked myself what is in the Bill on those terms. The answer is nothing at all. It is not possible to tell what classes of misconduct will attract a third party costs order. So I had to ask: how will the costs order be quantified? That cannot be found out from the Bill either. I then had to ask: what right has the third party to be heard or to be represented? But that cannot be found out because all those matters, at least to some degree, are to be prescribed by regulation. Again the Lord Chancellor will lay down the regulations and again they will not be the subject of effective parliamentary control. Indeed, so far as the regulations on misconduct are concerned, all they touch on is what is not misconduct, not what is misconduct. That is a pretty rum way of doing business.
	I am not trying to pretend that the Bill represents a series of civil liberty issues, as the Criminal Justice Bill did which we recently sent to the other place. I spoke repeatedly on that and it raised important issues of civil liberties and public rights. However, there is much in this Bill that is profoundly unattractive. At the end of the day, it is an enabling Bill. We start the process and once it has started we have lost our control over it. I find that a very undesirable state of affairs.
	So when the Committee undertakes its scrutiny of the Bill, I hope that we will make a serious attempt to achieve strong local input into the management and delivery of the criminal justice system. I hope further that the rights and obligations of the individual are defined in the Bill and not left to secondary legislation. To the extent that secondary legislation is inevitable, and I know that it always happens, I hope that there is a strong presumption in favour of the affirmative rather than the negative procedure. We should be very, very cautious about allowing Ministers or officials to change substantive law—enactments—by way of regulation.
	I am afraid that, despite the chorus of approval for much of the Bill, I remain deeply sceptical about its main purpose and nature. Left to myself, it would not get a Second Reading.

Alan Hurst: I am obliged to you, Madam Deputy Speaker, for calling me to speak in this important, if not dramatic, debate. I declare an interest as someone who plied his trade, or calling, in the magistrates courts for a number of years. In that time, I became aware of the important function that they, and those who serve in them, perform.
	Like many other hon. Members, I have had the misfortune of losing one magistrates court in my parliamentary division, and I am about to lose a second. Had I served in Parliament for longer, I would be able to claim the loss of four magistrates courts over 25 years in my district alone. Other hon. Members have mentioned accessibility, and there is a problem with that. Other than in Lincolnshire, the magistrates courts committees are not mourned because they oversaw the closure of one court after another and were unreceptive to the pleas of local people and members of local councils to keep courts open. It may not be the magistrates who serve on those committees who determine policy; I suspect that it is often the permanent employees—the chief executives. Nevertheless, the magistrates courts committees do not appear to have a sympathetic reputation in the House, and there seem to be few who will mourn their passing.
	The consequence is that the Lord Chancellor, or his successor in title, will have drawn to himself many other powers that he previously appeared not to have. He will be able to close magistrates courts, rearrange magistrates courts and deal with all manner of things. As the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) said, essentially all the power will be in the hands of the Lord Chancellor or his successor.
	There is an opportunity there that hitherto did not exist. Previously, as has been said, when a court was destined for closure it almost entered a kind of purdah. The Lord Chancellor's representative in the House could not speak about it because the matter was going to the appellate court, the local magistrates courts committee would not speak about it in terms that led one to believe that it was open to reason, and hon. Members on both sides of the House would feel frustrated in any endeavour to advance the interests of their local communities.
	That excuse will now be gone. The power to decide whether courts stay open or close will be entirely in the hands of the Lord Chancellor or his representatives. Therefore, we will be able to make representations on closure directly to the Minister on the Floor of this Chamber.
	We have had the pernicious system whereby the magistrates courts committee announce a proposed closure, and that may go to appeal. Meanwhile the court will wither on the vine because the magistrates courts committee will often redirect business away from it. Then the Member of Parliament will be told that no one is using that court, but the reason why no one is using it is that the magistrates courts committee, during the period of appeal, has ensured that no one will use it.
	Another aspect of accessibility on which I should like to comment concerns rearranging the court's business. With the magistrates courts committees and the local courts, there is a tendency to distribute business as it fits in with their scheme of things—trials in this town, youth courts in that town, early guilty pleas in this town—irrespective of where the defendants, witnesses, probation officers, solicitors or anybody else might be.
	Because the county of Essex, with which I have some familiarity, is convenient for the Crown Prosecution Service, all cases for committal to the Crown court go either from the Basildon court or the Chelmsford court. Irrespective of where the case originates, they go from those courts at the convenience of the CPS, so everybody else involved has to travel to those courts for that purpose, irrespective of other cases.

David Taylor: That raises the further point of the location of the judicial hearing being effectively detached from the scene of the crime. If there is not a link between the two, and so no potential for media coverage, the constraints that result from media coverage will not be present in the judicial system. Is that not regrettable?

Alan Hurst: My hon. Friend is right. It goes further than that, because one of the gems of the lay magistracy is their local knowledge, and the further one separates the scene of the crime, the charging of the offence and the witnesses from the magistrates who know that area, the weaker becomes the case for local involvement.
	The situation is seen more acutely with bank holiday and Saturday courts. Again, the powers that be deem that there will be only one or two for the whole county, so again, people involved in the system have to travel long distances, with no regard for their convenience, but only for the convenience of those employed by the system. The Lord Chancellor therefore has a marvellous opportunity, if he uses his discretion rightly, to make the Court Service serve the people who are involved in it, rather than merely serving the convenience of administrators. We need to be a bit careful about that. It is absolutely right, as my hon. Friend the Member for Stafford (Mr. Kidney) said, to have proper witness rooms to separate witnesses from defendants and to have creches and every other facility that modern man and woman know of. However, if one is disabled and has to travel 30 miles to get to those facilities, one's degree of access is not as high as it was when there was a much simpler building with far less grand facilities.
	The reason why security is a greater problem than it was formerly is that police officers are not automatically in court. When I prosecuted for the county, I would have a grizzled police sergeant sitting next to me in court—first, to make certain that I did not make a hash of the case and, secondly, so that he was on hand to deal with any eventuality. In the cells below the courthouse, there would be police officers who were there as the guardians and jailers of those who were to appear in court, and so that in the event of a problem they would be on hand to deal with it straight away. Traditionally, courts were built next to police stations and there would be a tunnel between them. Security was not the problem that it has become in the more hygienic times in which we now live. If a police presence could be restored to courts, the over-neurosis about security might fade away.

Nick Hawkins: The debate has been an example of Parkinson's law in parliamentary terms, in that speeches have expanded to fill the time available. One or two have gone into quite a lot of detail, but that is no bad thing.
	As the Parliamentary Secretary, Lord Chancellor's Department, the hon. Member for Pontefract and Castleford (Yvette Cooper) said, the House overlooks the smooth running of the courts at its peril. She said that she wants the courts to be in touch with the communities that they serve; Conservative Members would agree with that. There followed a somewhat mistaken intervention by the hon. Member for Thurrock (Andrew Mackinlay). If I may respectfully say so, the hon. Member for Braintree (Mr. Hurst) repeated the erroneous view that they share. They both correctly said that they wanted to keep courts in their constituencies open, and the hon. Member for Thurrock expressed his pleasure that the Minister has overruled the original decision by the magistrates courts committee to shut the court in Grays in Thurrock.
	Both hon. Gentlemen are mistaken, however, in thinking that the object of their scorn should be the magistrates courts committees. I point out to the hon. Member for Braintree, and hope that he will pass it on to the hon. Member for Thurrock, that every magistrates courts committee in the country has been so boxed in by the Government's guidance—I am not making a politically partisan point; this has been true under Governments of both parties—that they have had little choice but to decide to close courts. What is wrong is the guidance.
	If the hon. Member for Braintree really believes that the situation will get better as a result of the Bill making the process ever more centralised and giving ever more power to the Lord Chancellor, I fear that he is sadly mistaken. The problems that he describes—the centralisation of decisions to suit the convenience of the Crown Prosecution Service and the interests of the administrators, the bureaucrats and the system, not those of our constituents—will continue to an even greater extent. I echo his complaints, but he and his hon. Friend were firing at the wrong target.
	More than 100 courts have closed since the Government came to power in 1997. The situation has been getting worse. The hon. Member for Braintree is wrong to say that we have been unable to raise these issues in the House. My right hon. and hon. Friends have done so for years at every Lord Chancellor's Department and Solicitor-General's Question Time. The situation has got no better because the Government have not been prepared to accept that what is wrong is the guidance given to magistrates courts committee. We fear that this Bill—this further centralisation—will make matters worse.
	In opening the debate, the Parliamentary Secretary set out her view of the new executive agency structure. Conservative Members believe that it contains great dangers, and could be a charter for an ever-expanding bureaucracy. As my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) said, we are worried about increased centralisation. The Government's hallmarks are more tax, waste, central control and ever-expanding public sector jobs. I respectfully agree with the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), who made a sensible intervention on the Parliamentary Secretary and to whose wise words we should listen often. She said that she was not in favour of increasing the number of agencies. That is the voice of reason, from a senior Labour Back Bencher with great experience of the expansion of bureaucracies.
	In response to an intervention by my right hon. and learned Friend the Member for Sleaford and North Hykeham, the Parliamentary Secretary conceded that the new courts boards will not necessarily have the power to do anything except express a view; they have no executive power. Is not there a danger that they will simply be talking shops? The right hon. Member for Berwick-upon-Tweed (Mr. Beith), who chairs the new Select Committee on the Lord Chancellor's Department, pointed out that, as many witnesses have stated, boards are neither one thing nor the other.
	The Parliamentary Secretary said that the Bill provides for new arrangements for magistrates to move benches if they move house, and for the Judicial Studies Board to have a greater role in training. Conservative Members welcome those provisions. As my hon. Friend the Member for Stone (Mr. Cash) said, parts of the Bill are welcome, but we are worried about others, especially bureaucracy.
	The Parliamentary Secretary who opened the debate said that she expected Government amendments on fines to be tabled in Committee. We shall obviously consider them when we see them, but I hope that both Parliamentary Secretaries will listen to the wise words of my hon. Friend the Member for Woking (Mr. Malins), with all his experience as a stipendiary magistrate and deputy district judge. Many Labour Back Benchers expressed anxiety about the way in which the operation of fines undermines faith in our justice system.
	The Parliamentary Secretary also said that she expected Government amendments to be tabled on contracting out. I hope that her fellow Parliamentary Secretary, the hon. Member for Doncaster, Central (Ms Winterton), will confirm in her winding-up speech that we shall see the Government amendments as soon as possible, given that we expect the Committee stage to begin shortly.

David Taylor: Does the hon. Gentleman hope that the Government will learn from the private finance initiative disaster of the Libra computer system? That showed the awful consequences of allowing the private sector to be uncontrolled, and to deliver software in a loose framework.

Nick Hawkins: I hope that lessons will be learned from a history of problems that have arisen when contracts are not sufficiently tightly specified. That applies not only to the justice system but across government. Often, specifications are not drawn tightly enough and the result is a shambles. The hon. Gentleman, from his distinguished experience as a magistrate, has contributed sensibly to many of our debates. I look forward to his comments in the Standing Committee, if he serves on it.
	The Parliamentary Secretary who opened the debate rightly commented on part 4, which relates to court security. Again, Conservative Members accept that it includes some sensible provisions. I agree with the remarks of the hon. Member for Braintree about the police. I too remember when police sergeants sat in court next to the prosecutors and defenders. Perhaps more of a police presence would mean that we did not need some of these provisions.
	The right hon. Member for Berwick-upon-Tweed, who chairs the Select Committee, made a point, which many Labour Members also picked up, about newspapers wasting a huge amount of taxpayers' money by causing trials to be aborted. The hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Soley) knows that throughout my time in Parliament, I have supported his efforts to bring newspapers to account. He pressed the Parliamentary Secretary on the need for the draft regulations to be seen before the Committee stage, and I agree with that.
	My hon. Friend the Member for Stone, leading for the Opposition, rightly praised the work that has been done on the Bill in the other place, particularly by our noble Friend, Baroness Anelay of St. Johns and her colleagues. He said that we hoped that the Government would continue to accept the amendments that were passed in another place, and I hope to hear a clear reassurance from the Minister that the Government will not seek to unwind the very sensible improvements that were made to the Bill there.
	My hon. Friend also praised the new Select Committee on the Lord Chancellor's Department and its report. He pointed out that the Committee had concerns about the accessibility of the courts, about justices' clerks becoming civil servants, about fine enforcement and about the problem in the London area—referred to by my hon. Friend the Member for Woking—of £92 million worth of fines having been imposed, but only £41 million having been collected. Those are matters to which we shall undoubtedly return in Committee.
	The hon. Member for Clwyd, West (Gareth Thomas) intervened on my hon. Friend the Member for Stone about the full recovery of costs as a basis for the whole system. My hon. Friend rightly pointed out that we hope that judicial salaries will continue to be kept out of the costs recovery system. A valuable amendment on that matter was passed in another place. My hon. Friend also raised the issue of fine enforcement and the ability to pay, pointing out that access to the courts is a constitutional right that should not be barred by excessive zeal in trying to recover the whole cost of the civil justice system.
	My hon. Friend also referred to the amendments proposed by the Magistrates Association, which were discussed in another place, and the issue of coterminosity between police areas and the 42 new court board areas. I was reminded that 42 was supposed to be the answer to the question of life, the universe and everything. It might not be that, but it is certainly useful to have had those amendments passed in another place.
	The undermining of local justice and the concerns about court closures, to which I have already referred, were also dealt with by my hon. Friend. We certainly need to keep the amendments to clause 30 that were passed in the other place. My hon. Friend also referred to the issue of high sheriffs and under-sheriffs, and the problem of the loss of emoluments for under-sheriffs and the indemnity of under-sheriffs between Royal Assent and the time when the new arrangements come into force. We shall return to that matter in Committee.
	The hon. Member for Wirral, West (Stephen Hesford) made a speech that, rather uncharacteristically, tended to undermine the spirit of co-operation that existed between the parties in another place. He rather comprehensively misunderstood and misrepresented the speech made by my hon. Friend the Member for Stone. He also misrepresented the Conservatives' position on the Proceeds of Crime Act 2002. I know a little bit about that, because I was one of the shadow Ministers who took that Bill through Committee. The hon. Gentleman said that the Conservatives had opposed the Bill. That was not the case; we supported large parts of it, and improved it by raising some points of detail. The Government's own Minister accepted the spirit of some of the things that we were trying to do to improve that legislation, as I hope the Government will do with this Bill.
	The hon. Member for Somerton and Frome (Mr. Heath) referred to the rumours—which we have all heard—that a Ministry of Justice might be created within a week or so, and agreed with the right hon. Member for Berwick-upon-Tweed about the need for consultation before major changes in the constitutional arrangements relating to the role of the Lord Chancellor came into force. The hon. Gentleman pointed out that there had been great cause for concern when the Bill was first published, but that it had been much improved in another place. He was quite right, however, to say that we did not want any backsliding on the improvements that had been made.
	The hon. Member for Somerton and Frome also referred to the fact that the process of justice is becoming more and more remote in this country. He took an intervention from the hon. Member for Clwyd, West, who offered a counsel of despair by saying that we could not have a court in every market town in every part of the country. The hon. Member for Somerton and Frome—and the Conservatives—pointed out that that is exactly what we used to have, and, indeed, had successfully for hundreds of years. We hope that one day, we might reverse some of the court closures and get back to a system that provides local justice.
	The hon. Member for Somerton and Frome agreed with an intervention from the hon. Member for North-West Leicestershire (David Taylor), who rightly pointed out the lack of deterrence involved when local newspapers decline to travel to faraway courts—a problem arising from the local court closures. I agree with the hon. Gentleman on that point. The hon. Member for Somerton and Frome queried what local courts boards would actually do, and raised the important issue of the different sizes of police areas.
	He mentioned third-party costs, the huge disquiet about police officers being paid by newspapers, and the bland assurances by the Press Complaints Commission, which he said—and I agree with him—were not acceptable. As he observed, a robust line will be needed in Committee.
	The hon. and learned Member for Dudley, North (Ross Cranston), the former Solicitor-General, rightly praised the work of Sir Robin Auld. He referred to the work of the new Lord Chancellor's Department Select Committee, on which he sits, and the conflicting evidence given to the Committee about the new courts boards. He also spoke of improvements in the enforcement of fines.
	In a powerful speech, my hon. Friend the Member for Woking described his experience of the fines issue. I hope that Ministers will think carefully about his important description of the situation at the sharp end. The hon. Member for Clwyd, West praised my hon. Friend's speech, and described the fines system as a travesty and a scandal. The right hon. Member for Berwick-upon-Tweed made another powerful speech about what has happened in the Lord Chancellor's Department Select Committee, and further powerful speeches were made by my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) and the hon. Member for Stafford (Mr. Kidney).
	The Bill has already been massively improved in another place. We hope that the Government will accept the improvements that have been made, and we look forward to dealing during the Committee stage with the ways in which it is still defective.

Rosie Winterton: This has been an interesting and wide-ranging debate reflecting an almost dangerous amount of expertise, represented not just by members of the legal profession but by members of the Select Committee. A number of points were made and I shall deal with as many as possible, but I think most Members agree that much of what has been raised will be dealt with in Committee.
	My hon. Friend the Member for Wirral, West (Stephen Hesford), my hon. and learned Friend the Member for Dudley, North (Ross Cranston), and my hon. Friends the Members for Clwyd, West (Gareth Thomas), for Stafford (Mr. Kidney) and for Braintree (Mr. Hurst) acknowledged that the Bill would ensure the existence of a modern and efficient court system, free from unnecessary and avoidable delay and in touch with the communities that courts serve. I was pleased that the hon. Members for Stone (Mr. Cash) and for Somerton and Frome (Mr. Heath) recognised that this was an important Bill that had been subject to many improvements in the other place.
	I was somewhat disappointed that the hon. Member for Surrey Heath (Mr. Hawkins) rather departed from that consensus. When it comes to court closures, he cannot have it both ways. He complains that the current system is leading to many closures, and then he suddenly wants to keep the current system. I should point out that there were seven court closures last year and 21 in 1996, under the last Administration. This year there have been eight appeals, four of which were accepted and four rejected. Between 1993 and 1996 there were 34, all of which were rejected.
	Many Members mentioned accessibility. The Government recognise that decisions on the location of courthouses are very important to local communities, and court boards will not simply be consulted about proposed closures. The issue has been raised by the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and by the Select Committee. I can assure them that the boards will be involved in the development of the estate strategy.

David Taylor: Given my hon. Friend's recognition of the importance of accessibility, would it not be a good idea to accept an amendment to clause 1 incorporating a requirement for accessibility in the general duties of the Lord Chancellor?

Rosie Winterton: That is in clause 30, which my hon. Friend will see is quite robust in ensuring that the principle of accessibility is included in the Bill.
	The courts boards will be consulted about any court closures, and will also be involved in the development of the estate's strategy for their area, covering magistrates and Crown and county courts. Clause 5 provides that their role will be to scrutinise draft and final business plans. Those plans will set out how the best use will be made of the area's resources, including court buildings. I hope that that gives some reassurance to hon. Members who have been worried about that issue.
	There was also discussion about local boards. Changes have been made to the Bill in response to concerns raised in the other place. The Lord Chancellor will now be under an obligation to give due consideration to the views of boards about the administration of the courts in their area. He will be accountable to Parliament for ensuring that the boards are properly involved in the work of the agency. It will be important to have proper arrangements in place to ensure that such co-operation takes place.

William Cash: I have waited until this moment to ask the Minister whether the amendments that were passed in the House of Lords will be accepted by the Government and will not be reversed in this House.

Rosie Winterton: Certainly, the amendment on accessibility will remain in the Bill. The Government have accepted it.

William Cash: I asked about all the amendments.

Rosie Winterton: There will be further discussions in Committee about the various amendments that have been made. I assure the hon. Gentleman that clause 30(2) will remain.
	Many hon. Members referred to fees. There has to be a proper system for allowing access to justice with regard to fees. At the same time, we must accept that it is right that, for example, insurance companies that argue about liability for motor accidents should pay, and that there should be a proper remissions policy for those that cannot.

Humfrey Malins: Will the Minister give way?

Rosie Winterton: No, I shall not give way, because I want to finish. I am slightly worried about the hon. Gentleman's reputation in the east end after some of the comments he made about fines. I should like to assure hon. Members that we are considering how to make it easier for the courts to impose deductions from the earnings or benefits of those who have defaulted on fines, and how to increase information flows from the Inland Revenue and the Benefits Agency.

Humfrey Malins: rose—

Rosie Winterton: I hope that that will answer some of the points that were raised, and I now want to wind up my speech.
	The Courts Bill contains important reforms that will encourage consistency and reduce delay across the criminal justice system. It will also ensure that our courts system gives a better service to victims, witnesses and court users.

Humfrey Malins: Will the Minister give way?

Rosie Winterton: No, I will not give way.
	The Bill puts local accountability at the heart of the new system, while maintaining quality of service in every area through national standards. It has been fully debated in the other place, and extensive discussions have taken place with those involved in the system and with the wider public. The Government have listened to the concerns raised during those debates, and have responded properly and positively to them.
	The Courts Bill will play an essential part in improving the public's perception of the courts, and will provide the right framework to support the invaluable work of the lay magistracy system. It is a vital part of the Government's programme of delivering justice for all, and I commend it to the House.
	Question put and agreed to.
	Bill accordingly read a Second time.

COURTS BILL [LORDS] (PROGRAMME)

Motion made, and Question put forthwith, pursuant to Orders [28 June 2001 and 29 October 2002],
	That the following provisions shall apply to the Courts Bill [Lords]—
	Committal
	1. The Bill shall be committed to a Standing Committee.
	Standing Committee
	2. Proceedings in the Standing Committee shall (so far as not previously concluded) be brought to a conclusion on 10th July 2003.
	3. The Standing Committee shall have leave to sit twice on the first day on which it meets.
	Consideration and Third Reading
	4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion five and a half hours after their commencement.
	5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion six and a half hours after the commencement of proceedings on consideration.
	6. Sessional Order B (programming committees) made on 28th June 2001 shall not apply to proceedings on consideration and Third Reading.
	Other proceedings
	7. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further message from the Lords) may be programmed.—[Mr. Ainger.]
	The House divided: Ayes 291, Noes 82.

Question accordingly agreed to.

COURTS BILL [LORDS] [MONEY]

Queen's recommendation having been signified—
	Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a)(Money resolutions and ways and means resolutions in connection with Bills),
	That, for the purposes of any Act resulting from the Courts Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of—
	(a) any expenses of the Lord Chancellor under that Act, and
	(b) any increase attributable to that Act in the sums payable under any other Act out of money so provided.—[Mr. Caplin.]
	Question agreed to.

COURTS BILL [LORDS] [WAYS AND MEANS]

Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a)(Money resolutions and ways and means resolutions in connection with Bills),
	That, for the purposes of any Act resulting from the Courts Bill [Lords], it is expedient to authorise—
	(a) provision amending section 329AA of the Income and Corporation Taxes Act 1988, and
	(b) the payment of sums into the Consolidated Fund.—[Dan Norris.]
	Question agreed to.

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6)(Standing Committees on Delegated Legislation), Consumer Protection
	That the draft Enterprise Act 2002 (Part 8 Domestic Infringements) Order 2003, which was laid before this House on 12th May, be approved.—[Dan Norris.]
	Question agreed to.
	Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6)(Standing Committees on Delegated Legislation),

Competition

That the draft Enterprise Act 2002 (Supply of Services) Order 2003, which was laid before this House on 12th May, be approved.—[Dan Norris.]
	Question agreed to.

Mr. Speaker: With the leave of the House, I shall put together motions Nos. 7 to 9.
	Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6)(Standing Committees on Delegated Legislation),

Contracting Out

That the draft Contracting Out (Administration of the Teachers' Pensions Scheme) Order 2003, which was laid before this House on 28th April, be approved.

Criminal Law

That the draft Referral Orders (Amendment of Referral Conditions) Regulations 2003, which were laid before this House on 1st May, be approved.—[Dan Norris.]
	Question agreed to.

Delegated Legislation

Ordered,
	That the Prosecution of Offences (Youth Courts Time Limits) (Revocation and Transitional Provision) Regulations 2003 (S.I., 2003, No. 917), be referred to a Standing Committee on Delegated Legislation.—[Dan Norris.]

CRIME PREVENTION (SMALL BUSINESSES)

Motion made, and Question proposed, That this House do now adjourn.—[Dan Norris.]

Nigel Evans: I was pleased to secure this debate to raise the problem of crime that is blighting small businesses throughout the country. I congratulate the hon. Member for West Bromwich, East (Mr. Watson), who secured a debate in a similar vein on 14 May. I want to cover the small retail sector as opposed to larger stores. They, too, suffer from retail crime, but I want to concentrate on the smaller end of the market this evening.
	I declare an interest as the owner of a retail business, which my sister now runs—and makes a profit—now that I have gone. I do not apologise for being passionate about my beliefs in small businesses and the small retail sector; involvement in such businesses has been an important part of my life. The fact remains that being a small retailer these days is far more dangerous than in the 1930s, when my grandfather started his store. We have seen considerable changes since, with many smaller enterprises closing down. There used to be a small corner shop on virtually every street—the "Open All Hours" of Ronnie Barker fame. Sadly, many of those have disappeared.
	The problems that such businesses face have also increased. As the hon. Member for West Bromwich, East told the House on 14 May, the retail industry employs 2.7 million people, with just fewer than half working in the smaller end of the business—not the Asdas, Tescos, Sainsburys and Safeways, but the smaller retail outlets. They employ 1.1 million people and produce more than 4 per cent. of the UK's turnover.
	Small retail business is part of the fabric of what was once described as a nation of shopkeepers. Many smaller businesses tend to be one-man bands or perhaps a husband and wife run the stores, and many work on the margins. If they employ anyone, it will be disproportionately female staff, who often work all hours just to make a living. It is mainly a cash trade, not credit cards or cheques, and the businesses are vulnerable.
	I should like to do my Huw Edwards impersonation by reading one or two articles from Convenience Store, which has run on a weekly basis some of the problems that retailers face up and down the country. It states:
	"A store manager in Cambridgeshire was knocked unconscious by robbers during an early morning raid. The raiders struck at the Budgens store, in Cambridge after climbing in through an upstairs window. After attacking the store manager the robbers escaped through a rear fire door with £5,745 in cash . . . The . . . manager was found by staff sprawled on the floor with a bruise on his head and a bloody nose. He was taken to a local hospital."
	Another article says:
	"A convenience store worker was tortured by vicious raiders during a robbery in Greater Manchester",
	when a stun gun was used against him.
	A further example says:
	"A store assistant had a screwdriver held to her throat during a robbery on a convenience store in Essex. Two robbers entered the Alldays store in Benfleet via the back door and demanded that the female member of staff hand over cash and the store's CCTV tape . . . A convenience store worker was threatened with a gun by two women during a robbery in East Sussex."
	I shall not read them all, because there are too many, but such stories appear every week in Convenience Store. For example, it says:
	"A store assistant has quit her job after being confronted by a pair of armed robbers in an Essex c-store . . . A 52-year-old convenience store owner was killed and another retailer left seriously injured after being attacked with a machete while working in their stores in Birmingham. Mother of four Parminda Poonia was viciously attacked in the Costcutter store she ran with her husband in Birchfield Road, Aston, at noon on September 16. Parminda, who leaves four sons, suffered four blows to the head during the attack and died in Birmingham's Queen Elizabeth Hospital".
	Those are the sort of crimes that are now being committed in stores around the country. We could have a whole other debate on shoplifting, but retailers have to face violent crime every day. I pay tribute to Convenience Store magazine, which has published "Zero Tolerance" to give advice and guidance to retail owners about the actions that they should take to try to protect themselves. We should have zero tolerance for this crime. Some 20,000 attacks took place in 2001—an increase of 40 per cent. I understand that new figures from the British Retail Consortium will reinforce that trend. In total, thefts and robberies have hit a new record level, and the cost to the nation of retail crime is topping £2.4 billion.
	For smaller businesses, with few resources, crime can threaten their very viability and the employment that they provide. Business crime is sometimes seen as a victimless crime, but it cannot be victimless when violence is used against the employers or employees. The Alldays chief executive, in charge of 600 stores, stated that it is difficult to get staff in areas in which a store has been attacked.
	People also tend to think that goods are insured, so there is no problem. However, in many cases, the goods are not insured. The premiums for some of the smaller stores are so high, especially to cover money, cigarettes, top-up cards for phones and lottery terminals, that they cannot afford the insurance. It has also been estimated that when an attack takes place in a store, up to 40 per cent. of the staff have to take time off afterwards to recover in hospital or just to get over the trauma.
	Some of the smaller stores are working at the margins. The bigger stores can make 5 or even 7 per cent. profit on turnover, but some of the smaller stores are not making the money, even though they may have a large turnover.

Barbara Follett: Does the hon. Gentleman agree that the smaller stores are suffering from the success of some of the 250 retail crime partnerships that have been set up by the British Retail Consortium? Those partnerships benefit the bigger stores but the smaller convenience stores are outside the system, so they are even more isolated. The people who are being excluded from the bigger stores by the retail crime partnerships are now attacking the convenience stores, so they are even more at risk than they were before.

Nigel Evans: I agree with the hon. Lady. Many of the smaller businesses do not know anything about the crime partnerships and they feel as if they are on their own. Only a small percentage of businesses in the Ribble valley, for example, have anything to do with the crime partnership. We need to look again at how we can involve smaller businesses in crime partnerships. Small businesses that are only one or two-man operations may not be able to send someone to meetings, because they do not employ any cover. We must be alert to the realities of what we can do for those smaller businesses.
	Smaller businesses may not be able to afford security measures. They may have a high turnover, but they make only 5 per cent. on lottery tickets and less on some of the phone cards.
	Even if a business has a respectable turnover, it might make only a small profit. Such businesses do not have the money to invest in the security measures installed in some of the larger stores.
	The National Federation of Retail Newsagents carried out a survey in my area, which is seen as fairly affluent, and in Blackburn. It painted a picture of a rising trend in the fear of crime. People are afraid. The postmaster in Chatburn, one of my local villages, told me that there is a fear factor; even there, people fear attack. He lives above the shop and told me how, in the middle of the night, youths smashed a window, broke in and stole the automatic cash machine. The raid was obviously well planned, but the people living above the shop were afraid of what might have happened to them if they had gone downstairs and caught those thieves. When people read all those articles in Convenience Store, they are afraid.

Barbara Follett: There is a rural area in my constituency, and I have noticed that fear of crime is a factor in the closure of rural post offices. We all know how necessary rural post offices are, so, in areas where there are no neighbourhood wardens and no possibility of a crime partnership, I beg the Minister to look into ways of safeguarding what may be the only store in a village.

Nigel Evans: I agree with the hon. Lady. When violence and intimidation are used against members of staff, they ask why they should put up with it. Owners of businesses decide that they cannot put up with it either, so they shut up shop.
	I want to turn to what the Government can do to help smaller businesses. We need a police presence and appropriate sentencing. Retail crime should be taken very seriously indeed. The attitude should not be, "Oh well, it's only retail crime—they can afford it." Such crime has an immense impact, especially in rural areas or in areas where there may be only one store. Sentences must be seen to be a deterrent. When financial penalties are imposed, more must be done to recover them. There are financial penalties in 70 per cent. of cases, but the money is actually paid in only 59 per cent. of them, which causes great despondency in the retail trade.
	Anyone who attacks staff working in a retail business should be dealt with as seriously as someone who attacks a nurse in an accident and emergency department or anyone else doing public service. When a person is attacked while they are working with the public, the penalty should be much more severe.
	Much crime is drug-related. Apparently, goods worth between £20,000 and £40,000 must be stolen each year to feed one person's drug dependency. We must do more to ensure that such people are caught and given rehabilitation rather than continuing to steal from stores to feed their drugs habit. We need a crackdown on such drug users.
	The Government have given a £15 million grant over three years for closed circuit television in deprived areas. However, we must also consider small businesses in other areas, whose owners cannot afford to install CCTV themselves. I hope that the Government can consider them. Such businesses may not be in deprived areas but they cannot afford such measures. Even shutters for a normal store cost about £2,000, which is a lot of money for many people. Will the Minister consider that point, too?
	The NFRN survey reported that the lower a store's turnover, the less likely it was to invest in security measures. CCTV alone is not the answer. The hon. Member for Stevenage (Barbara Follett) referred to policing. The police need to be far more visible around small businesses. If people see police officers on the beat, they feel much more secure. As some small businesses are open until 9, 10 or 11 o'clock at night, we need policing at those times. Will the Minister consider how local crime partnerships can be extended to include small businesses so that at least they have that cloak of security and feel that they are not alone?
	The Minister should treat the problems of violence, vandalism and thieving in shops and stores throughout the country seriously and urgently. Ordinary, decent and hard-working retailers and their staff are getting battered and injured daily. That has got worse over the years, and it is still getting worse. In some areas, it has reached crisis point, and I want to know when the Government will recognise the problem and do something concrete about it that will give smaller, independent retailers a ring of security and safety.

Barbara Follett: Like many other MPs, I have a small shop. It is where I operate from, and I have had to invest in its shutters and to put in CCTV and other security measures. I would like the Minister to press local police forces to ensure that antisocial behaviour orders are brought into force, because I find it difficult to get such orders put in place in my constituency. We have streamlined them, but there is still resistance among officers, and I should like some work to be done on that. My life and that of my caseworker are being made a misery at the moment by a youngish man of between 11 and 13 ringing the doorbell, although I think that an ASBO is about to be imposed. However, that is a minor nuisance compared with what other shopkeepers have to suffer. We have the instruments; we just need to ensure that they are used.

Nigel Evans: I agree, and if a small group of young people persistently behave abusively, it can be hell for people who run retail stores because they are worried about their security and frightened that those people will come into their shops, and we know how they operate.
	I hope that the Minister will give some positive news tonight and that, at the end of the day, Convenience Store magazine, which has a run a very successful campaign, will be able to print fewer articles about genuine, hard-working people being battered, injured and, indeed, killed. Perhaps we can then give three cheers to the Minister for listening and proposing action.

Bob Ainsworth: I congratulate the hon. Member for Ribble Valley (Mr. Evans) on securing this Adjournment debate and on raising these important issues. I fully understand the detrimental effect that crime against business has throughout the community and the damaging effect that crime, particularly violent crime, can have on people's lives, their businesses and their families. That is why the Government are determined to address the problems in the most effective way possible: in partnership with those businesses and other stakeholders, such as the police.
	In December 2002, we launched a consultation exercise in which we sought the views of business and other interested organisations on how we can work together more effectively to tackle crime. The consultation period has now ended and the responses are being analysed. As part of the consultation process, the Home Office and the Small Business Service jointly organised a seminar for small businesses and obtained the views of those present in a series of workshops. I am very grateful to all those who responded so fully to the consultation, and their views will be key to helping us to develop a clear strategy for better working with those in business to reduce business-related crime.
	The hon. Gentleman has particular knowledge of, and interest in, the problems that face small retailers. I am sure that he will have welcomed the scheme, announced by my right hon. Friend the Home Secretary, in which £15 million was allocated to improve security for small retailers in deprived areas throughout England and Wales. Funding has been provided so that security improvements can be made to shops and shopping parades to help to tackle crime and disorder problems on their doorstep. We helped 7,500 shops in the first two years, and with the £6 million that we still have to allocate this financial year we hope to help a further 5,000 shops.
	Some businesses in the hon. Gentleman's constituency have benefited from the scheme. For example, last year, the scheme paid for the installation of an external CCTV camera outside a late-opening shop in the Longridge area. That is the kind of small scheme that we can implement through those programmes. Although I accept that the programmes are targeted on businesses in deprived areas, the problems go wider than that, as the hon. Gentleman said, but I ask him to accept that there are particular pressures on businesses in deprived areas, where those businesses are badly needed by the community yet the crime that they suffer effectively drives them out and prevents them from serving the community.

Nigel Evans: Clearly, I am grateful for the money that has gone into Longridge. Is it possible, however, to examine what the Association of Convenience Stores has suggested: a 100 per cent. write-off for equipment that is used for security in smaller stores?

Bob Ainsworth: The hon. Gentleman is right: we must look at how we can most effectively help as a result of the consultation. I know that he and the convenience store organisation will have some input into that consultation and will evaluate all the views to enable us to allocate what moneys are available in the most appropriate way and ensure that they are used effectively.
	We also continue to support retail business crime partnerships. My hon. Friend the Member for Stevenage (Barbara Follett) raised that issue, and I am aware of the work that she has been doing with the British Retail Consortium for some time.
	Some valid issues have been raised in relation to the potential for effective partnerships through working with larger stores in larger city-centre locations. Coupled with the issue of cash, with which many small businesses, because of the nature of their business and the size of the transactions that they conduct, are forced to operate, there can be such potential. If we spread effectively that partnership working to the localities, and connect with small businesses, we can dislocate crime in those areas.
	When I talk to small retailers and the people who have been involved in the consultation, I am told that, in respect of crime reduction partnerships, there is a feeling that it is difficult to make contact and engage properly with small retailers, yet small retailers feel that they are not getting access to crime reduction partnerships and policies that operate in their local area. We therefore need to try to do everything that we can, as a result of the consultation, to find ways and means of breaking down those barriers to ensure that small businesses input properly into and receive advice from local partnerships, retail crime partnerships and crime reduction partnerships in their local area. There is certainly a problem, and much work that needs to be done, in relation to expanding our ability to make those contacts.
	The partnerships that exist have proved valuable. They have helped to identify and exclude offenders from retail centres. We are exploring the possibility of a pilot scheme to see whether schemes can be extended to include access to drug treatment services. The hon. Member for Ribble Valley mentioned the impact that drug addiction and the problems flowing from it have on business crime. As he will know, we are expanding treatment considerably: we plan to double the amount of treatment places under the drug strategy between now and 2008. We need to get into treatment—and we will do so by that time—at least 250,000 problematic drug users. At the moment, the maximum figure on which we could impact is about half that. The amount of drug treatment available, however, is growing at about 8 per cent. a year. We need to target that properly so that all those people who come into contact with the criminal justice system are brought speedily into treatment.
	There is no point in our being able to identify problematic drug offenders and to make those issues known to the court if they must then wait four to five weeks for access to drug treatment, because in the meantime they will commit crime, and businesses, at least in part, will be on the receiving end of their crimes. I have asked the hon. Gentleman to accept that although the situation is nowhere near what it needs to be, access times for drug treatment have fallen considerably. We need to drive those down even further, and we need to do so in the areas where there is the greatest need.
	Many of the Government's crime reduction programmes and initiatives, including our CCTV schemes, are aimed at reducing robbery, theft, reoffending and drug misuse problems. They also contribute to reducing crimes that impact on business.
	The hon. Gentleman referred to the Adjournment debate on 14 May that was held by my hon. Friend the Member for West Bromwich, East (Mr. Watson), in which I addressed various issues concerning criminal attacks on shop workers. The hon. Gentleman is right to say that my hon. Friend majored on the more substantial retail outlets, and I agree that there should be no tolerance of violence against shop workers—whether the employees of large concerns or small business people struggling to provide a service to their community and to keep their businesses alive. The issue is effectively the same. As the hon. Gentleman said, people sometimes dismiss crimes such as shoplifting as victimless crimes. They are not victimless crimes, because they destroy the profitability of businesses and their very existence in many circumstances.
	I made it clear in that debate that any form of violence is unacceptable and should not be tolerated. Under the Health and Safety at Work, etc. Act 1974, all employers have a legal duty to ensure—so far as is reasonably practicable—the health, safety and welfare of their employees. Their duty includes risks arising from violence at work. The Health and Safety Executive has issued guidance that can help businesses to deal with violence against staff working in the retail sector. The debate also covered the practical guides that the HSE produced to tackle the problems and causes of work-related violence.
	The HSE's publication, "Work-related violence: managing the risk in smaller businesses", will particularly interest the hon. Gentleman, given the practical help that it outlines to assist smaller businesses. The process of managing the risk from violence is similar to that for other health and safety risks. The key aspects of successful management are to identify the risks and decide what measures can be taken to prevent and to control them. The guide sets out a straightforward four-stage approach for tackling violence and includes case studies, including one involving a convenience store. It shows that there is usually a range of solutions to every problem. In particular, the guide demonstrates that the most effective measures do not have to be expensive. The most cost-effective solutions usually arise from the way in which the business is run, such as staff training, work schedules and the physical environment.
	We need to be more effective at making contact with small businesses, and the advice and methodology is available to help them to minimise some of the risks that they face. However, they often do not have the wherewithal, the time and the contacts to receive that information. We must try to ensure that we set up a system that helps them to access the information that is available.
	I am sure that the hon. Gentleman will also be interested to know that the HSE has commissioned research to find examples of good practice in preventing and managing violence to lone workers, including shop workers. The findings of the research are due to be published on its website this summer.
	I hope that the hon. Gentleman will agree that the ongoing measures that I have outlined demonstrate that we are fully aware of the problems of crime and associated violence that can face those who own, operate and work in small businesses. We shall continue to work with all our stakeholders, especially businesses themselves, to try to build on successes that we have had to reduce considerably the incidence of certain crimes. I am sure that the hon. Gentleman will want to have input in the consultation and determine whether it can be used to include a wider range of retailers to make it absolutely certain that we not only cover major city centres and district shopping centres but provide good access, advice and partnership working for lone businesses that serve our communities, such as rural outlets in deprived areas throughout the country.
	Question put and agreed to.
	Adjourned accordingly at fifteen minutes to Eleven o'clock.